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Manufacturing to rebound in third quarter

Source: PTI
May 06, 2009 19:04 IST
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India will have to wait till the third quarter of this fiscal to witness the rebound in manufacturing, triggered by low-end consumer durables growth in semi-urban areas, says research firm Deloitte.

"The upswing in manufacturing activity still has to be some months after the new Government is formed, that is by the third quarter of this fiscal, because a lot of policies and stimulus packages will have to find serious implementation," Kumar Kandaswami, senior director, Deloitte India told PTI.

It is demand from the semi-urban and rural economies, mostly for brown goods and low-end consumer durables, that will boost manufacturing activity in some sectors, he said.

Manufacturing production, which constitutes around 80 per cent in the Index Industrial Production, declined 1.4 per cent in February compared to 9.6 per cent growth a year ago.

In major categories, only capital goods posted positive growth, while all other segments like consumer goods, intermediate goods and basic goods production contracted.

Within consumer goods, durables registered a 5.7 per cent growth, while non-durables contracted by 5.5 per cent.

In terms of industries, as many as nine out of 17 have shown negative growth in their output in February year-on-year.

Some industries showed a substantial decline, like metal goods production plunging by 31.3 per cent, food products by 28.1 per cent, wood and wood products by 16.5 per cent.

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