More sectors shrinking, says CII survey

This follows statement by P Chidambaram that the economic growth in Q2 would be better that that of a four-year low of 4.4%

After the purchasing managers’ index for the country’s services sector shrank at its fastest pace in four years, the number of sectors growing slowly or shrinking for a second quarter rose 85 per cent, says a Confederation of Indian Industry-Ascon survey.

This was 76.1 per cent in the same period last year. Of the 91 sectors surveyed, the number of sectors reporting excellent growth (above 20 per cent) were merely 4.39 per cent (four sectors) during July-September this year against 3.8 per cent in July-September 2012.

The high growth sectors  (between 10-20 per cent) have come down to 10.98 per cent this year from 29.1 per cent in the same quarter previous year.

The proportion of sectors reporting shrinking has risen 38.46 per cent in July-September from 15.5 per cent in July-September 2012, the number of sectors having more than doubled to 35 from 16. The number of sectors reporting low growth have shown a marginal decrease to 46.15 per cent from 51.4 per cent in the same quarter last year.

This comes after finance minister P Chidambaram recently said economic growth in the second quarter would be better than the four-year low of 4.4 per cent seen in the April-June quarter of current financial year.

 

Some segments of white goods industry such as refrigerators, air conditioners, small appliances registering about 12-15% high growth rate.  The LCD/LED segment has been witnessing a boost and growth has been exceptional pegging above 20% mark. The rural purchase trends and sales in tier 4 & 5 cities have contributed significantly to this growth.

 

Another thing to note is the clear shift of number of sectors from high growth (30 sectors last year as compared to 10 this year) and low growth sector to negative growth (16 sectors in negative from last year has increased to 35 sectors).

 

The basic goods sector has also registered low growth this time with major segments like steel, fertilizer, paints, pig iron, and cement registering growth between 0-6 percent on an average.