Sectors showing negative growth on the rise in Q3, says CII-ASCON survey

According to the survey, 31 out of a total 110 sectors (28.18 %) were negative compared to 21 sectors out of a total 101 sectors (20.8 %) in 2012

There has been a significant rise in sectors displaying negative growth for the October-December quarter of the current financial year, says a CII-ASCON survey, highlighting the ongoing slowdown in industrial performance,.

According to the survey, 31 out of a total 110 sectors (28.18 per cent) were negative compared to 21 sectors out of a total 101 sectors (20.8 per cent) in 2012. The survey also shows a contraction in the number of sectors recording low growth at 52.72 per cent (58 sectors out of 110 sectors) as compared to 56.4 per cent (57 sectors out of 101 sectors) in the same quarter the previous year.

The percentage of sectors reporting excellent and high growth in the current quarter is at 19 per cent, as compared to 16.8 per cent in the same quarter the previous year.

But at the same time, high growth sectors have shrunk to 10.90 per cent in Oct-Dec 2013 from 18.8 per cent during the same time last year.

The CII-ASCON Survey categorises the growth range in four broad categories, namely excellent (greater than 20 per cent), good (10-20 per cent), low (0-10 per cent), and negative (less than zero per cent).

“It is of utmost concern that the majority of segments in the basic, intermediate, and capital goods sectors continued to fall in the ‘low’ growth bracket during October-December 2013, as revealed by a disaggregated analysis of the CII-ASCON Survey. The consumer durable segment has also reported similar growth patterns with most of the segments recording low and negative growth, reflecting a disturbing trend,” said Chandrajit Banerjee, Director General, CII.

In this quarter, high- tech electronics items such as LED/LCDs and computer tablets along with scooters and scooterettes are the segments that have recorded excellent growth. “This growth can be largely attributed to the growing demand and preference of these products, especially in the tier-3 and tier-4 cities and a young population. Tractors has also recorded excellent growth for October-December 2013, reflecting an improved performance of the farm sector,” the survey said.

Sectors such as earth moving and construction equipment, machine tools, telecom equipment, industrial gases, distribution transformers, textile machinery, motors, relay control panels, power transformers and pumps, have registered low or negative growth. The core sectors viz steel, cement, petroleum and crude oil have also recorded low growth.

The survey respondents have raised concerns over the weakening of the economy and stagnation in manufacturing growth. The global economic uncertainness continues to prevail and impact the growth of investments and exports in the country. Respondents have stressed on the need for reviving the investments, rationalising taxation structure and increasing infrastructure spending to kick start investment and growth in the economy.