The contraction of 1.6% in the factory output for January comes way beneath expectations, suggesting there are quite a few pockets of frailty inside the broader recovery. The slowdown was broad-based – each capital and customer goods fared poorly. The terrible news is that labour-intensive sectors of the economy stay sluggish. The Nomura India Business Resumption Index (NIBRI) fell to 95.2 for the week ending March 7 from 98.1 in the preceding week with the gap from the pre-pandemic regular slipping to 4.8 pp from only .7 pp a fortnight earlier.
While the services sector is choosing up — the February composite PMI was up at 57.3 from 55.8 in January — the loss of momentum elsewhere is a concern at a time when there is fresh surge of infections specifically in essential states like Maharashtra. A new round of lockdowns could slow the revival. Already, mobility indices had been weak in the week to March 7 each the Apple driving index and the Google retail & recreation indices took a hit, although workplace mobility continued to boost.
Retail two-wheeler sales continue to be dull among April 2020 and February, they have gone up in just one month possibly mainly because autos have develop into highly-priced and unaffordable for some sections. While GST collections for January surpassed expectations, the generation of e-way bills has stayed more or significantly less flat given that October 2020. FAStag collections continue to develop at quickly clip but possibly mainly because of elevated usage.
Loan development when ticking up remains low at about 6% importantly corporate bond issuances have come off sharply in January and February to levels of Rs 45,000 crore per month compared with the typical for the March-December 2020 period. Pertinently, state-owned entities borrowing look to be performing the bulk of the borrowing.
The overall performance of the core sector, for instance, continued to boost in January but at a slower pace the boost was .1% month-on-month seasonally adjusted versus 2.2% in the preceding months. Worryingly, building-associated sub-sectors are lagging the other sectors agriculture is performing exceptionally properly.
The demand for electrical energy, having said that, has been somewhat muted of late.
CMIE information show that at 6.9%, unemployment in February was reduce than the typical of 7.3% given that July 2020 having said that, each the labour force participation price (LPR) and the employment price (ER) stay drastically reduce than their levels prior to the lockdown and it could be a when prior to these move up to pre-pandemic levels. Also, the MGNREGA claims continue to rise even as the incremental particular person days work generated have remained higher. This would recommend that quite a few rural workers may perhaps not have got back their urban jobs.
Again, when exports have been displaying an uptrend in the previous couple of months, engineering goods, which bring in a third of non-oil exports, contracted sharply in February. Most critically, the recovery has been uneven in the sense that larger corporations have walked away with more when smaller sized organizations have benefited significantly less. According to Crisil Research, significantly less than 20% of 400 smaller sized corporations (amongst ~800 listed ones) saw positive income development in the initial half of fiscal 2021 compared with 35% of the leading one hundred corporations. The agency points out that credit development has been the weakest for micro and modest enterprises.