Industrial Slowdown Continues

Indian industry continues to suffer the effects of a slowdown. According to data released yesterday by the Associations Council of the Confederation of Indian Industry, 52 segments have reported lower production growth in the first quarter of the current financial year in comparison to the same period of the last financial year. Only 29 have shown an improvement while one shows no change. The latest figures belie the hopes of a potential revival indicated by the figures for April, which showed signs of a pick-up in certain key segments like automobiles _ especially cars and two-wheelers _ consumer durables, cement and steel.

 

The CII data has been compiled on the basis of feedback from the chamber's member-companies and its 61 affiliated associations which, according to CII, account for over 65 per cent of the total industry output in most cases.

The data shows that during April-June 1998 over April-June 1997, an overwhelming section of the industry including steel (1.6 per cent) and cement (5 per cent) reeled under negative or moderate growth rates. The entire automobile sector _ except two-wheelers _ recorded negative output growth. The overall production growth of 2 per cent was achieved mainly on the strength of a 2 per cent growth in scooter production, 19.1 per cent growth in motorcycle production and a 4.1 per cent growth in moped production.

On the flip side, medium and heavy commercial vehicles (-54 per cent), light commercial vehicles (-29 per cent), cars (-4 per cent) and multi-utility vehicles (-14 per cent) recorded negative production growth.

Capital goods like textile machinery (-25 per cent) and basic goods like steel (1.6 per cent), cement (5 per cent), diesel (-0.2 per cent), petrol (6.8 per cent) and oil refinery (3 per cent) also bore the brunt of the slump in the economy to record dismal performances. However, the silver lining was the robust growth in colour televisions (40 per cent, riding on the soccer World Cup wave), software (50 per cent), refrigerators (20 per cent) and airconditioners (15 per cent). The CII survey attributes the poor performance to the South-East Asian currency turmoil, high export credit rates and non-tariff blames _ apart from low demand and infrastructure bottlenecks.