Early signs of recession?

Showing early signs of slipping back into recession, Indian industry recorded dismal growth for the April-September 2007 period with almost 60 per cent of the 91 sectors surveyed recording a low growth rate of below 10 per cent.

Basic goods, including cement, fertiliser, polymer, steel as well as intermediate goods recorded either moderate or negative growth, according to a recent CII-ASCON survey.

The only exception was consumer durables, with sub-sectors like scooters, electric fans, microwave ovens and air-conditioners recording excellent growth rates of over 10 per cent during this period. But even within consumer durables, utility vehicles, motorcycles and refrigerators showed negative growth rates.

Out of a total of 91 sectors reporting production, 37 sectors have reported either excellent or high growth rate of more than 10 per cent, while 17 sectors recorded negative growth rates. The percentage of sectors in excellent and high category has declined while the percentages increased for moderate and negative category over the period April 2007 to June 2007.

Says Satish Kaura, Chairman, CII Industry Council: “These low growth rates were mainly due to high interest rates prevailing during the period, reduced credit availability and rupee appreciation. The impact of the FTAs signed with some countries in the last two years is also showing.”

According to him, the survey has revealed that the automobile industry, including motorcycles and three-wheelers, is in the negative sales growth category.