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Signs of recovery in manufacturing

NEW DELHI: The manufacturing sector has shown marginal signs of recovery from the economic slowdown, with a few sectors moving from negative territory to moderate growth while a few others have moved from moderate to positive growth during January-March this year as compared to the previous quarters of 2008-09.

Revealing the findings of its Ascon survey for April-March 2008-09 in a statement here on Saturday, the Confederation of Indian Industry (CII) noted that the manufacturing sector that moved from the negative growth group to moderate growth during the third and fourth quarters of 2008-09 were fertilizers, low and high density polyethylene (LDPE/HDPE), pig iron, steel and mopeds.

The vanaspati sector moved from moderate to the high growth group during this period.

During the year, high growth in production was reported by 18.75 per cent of the 80 segments in the manufacturing sector.

Owing to the impact of slowdown in the wake of the global meltdown, the percentage of these segments reporting high growth declined markedly in the last two quarters of 2008-09.

In fact, the year-on-year production growth data has revealed that the manufacturing sector witnessed a significant slowdown during the fiscal when compared to 2007-08.

Commenting on the Ascon survey, CII Director General Chandrajit Banerjee said: “While on a yearly basis the manufacturing sector has slowed down, there are some green shoots from a few sectors that have demonstrated a marginal pick-up during the second half of 2008-09 when compared to the first half. These demonstrate a cautious optimism on signs of recovery”.

The sectors which reported high growth (10-20 per cent) during 2008-09 are: asbestos cement, switchgears, power cables, capacitors and industrial gases like argon, carbon dioxide and hydrogen.

On the other hand, sectors reporting negative growth were: edible oils, bus and truck tyres, the entire range of commercial vehicles and capital goods.

In the moderate growth (up to 10 per cent) category were sectors such as cement, polymers, sponge iron, circuit breakers, auto components, electric motors, transmission line towers, auto industry, including cars, scooters, motorcycles, other consumer durables like colour TV, refrigerators and electric fans. Sectors reporting excellent growth (over 20 per cent) were industrial gases like nitrogen and oxygen, power transformers and electric two-wheelers.

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