ET Now launches economic activity ‘lead indicator’
By Poonam Saney
Is business activity picking up? Is the consumption demand still strong? Here’s presenting ET Now’s Economic Activity ‘Lead Indicator’. The Lead indicator marks the trends across various consumption and business activity segments.
A close look at the consumption trends suggests that largely the consumption demand remains strong in economy.
After contracting during Nov-Dec 2016 period due to note ban, passenger vehicle sales, 2 wheeler sales, LCV sales are showing a healthy uptick during July-sept as GST led to some price cuts, good monsoon also perked up demand, improved sentiment and some festive season buying seen during Sept as well.
Oct saw a contraction in vehicle sales in PV, 2W segment however this data trend needs to be checked going ahead. Most importantly we are still seeing strong sales in LCV segment even during Oct which does say that consumption demand broadly is intact as LCVs are also used to transport various goods across the country. With lack of an exact proxy to Consumer durables, we have used the data from IIP for consumer durables which still shows a contracting demand due to Gems & jewellery sector being impacted. Pick up in Consumer non durables has surprised.
On the business activity front, we are clearly seeing a pick up trend in CV production in during July-sept vs contraction in Apr-June although there is some seasonality here. Overall Vehicle production, Air Cargo, Railway Freight remain fairly strong during July-sept period. However with front loading of Govt spending during Apr-June, Govt spending is slower during Aug-Sept. There also seems to be some pick up in core sector activity with Coal output being strong. However there still seems to be very muted Cement production and overall Infra/construction goods activity yet needs to pick up.
Broadly Q2 economic activity seems to be far on consumer and biz activity front vs Q1 as denoted by the Lead Indicator data.
Let’s block ads! (Why?)
Via:: Economic Times – Stocks