Raising concerns over the weakening of the economy and stagnation in manufacturing growth, a survey by industry body CII and ASCON pointed at a significant rise in the sectors displaying negative growth in the third quarter of the current fiscal. The survey found that industrial activity in the October- December 2013 quarter remained subdued and grim, growing almost in-line with the growth of previous quarter.
The CII-ASCON Survey categorizes 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).
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 showed 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 Q3FY13. Although, the percentage of sectors reporting excellent and high growth in the current quarter stood at 19, as compared to 16.8 per cent in the same quarter the previous year, high growth sectors shrunk to 10.90 per cent in Oct-Dec 2013 from 18.8 per cent during the same time last year.
Worryingly, majority of segments in the basic, intermediate, and capital goods sectors continued to fall in the ‘low’ growth bracket during October-December 2013. Meanwhile, consumer durable segment also reported similar growth patterns with most of the segments recording low and negative growth, reflecting a disturbing trend. Additionally, 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 registered low or negative growth, besides the core sectors viz steel, cement, petroleum and crude oil.
Notably, for the quarter, high- tech electronics items such as LED/LCDs and computer tablets along with scooters and scooterettes were the segments that recorded excellent growth. This growth was on back of growing demand and preference of these products, especially in the tier-3 and tier-4 cities and a young population. Besides, tractors have also recorded excellent growth for October-December 2013, reflecting an improved performance of the farm sector.