CII ASCON survey finds economic recovery on track

08 Jun '16

5 min read

The CII ASCON survey results for the quarter, January - March FY16, reveals an improvement in growth trends in terms of production in the Q4 FY16 quarter over the corresponding quarter a year ago. The current trends also point towards a bottoming out of growth trends in the majority of sectors.

Commenting on the performance of the sectoral growth trends, Ms Shobana Kamineni, President Designate and Chairperson, Associations' Council, Confederation of Indian Industry (CII), said that “While the pace of economic activity remains uneven across sectors, participation of more and more sectors in the uptick is pointing to a strong revival in the economy with sentiments far more inspiring than before. We are hopeful that going forward, given the government's continued focus on reviving demand, the current uptick in growth momentum is likely to be supportive of a robust recovery in the coming quarters.”

The Survey, which tracks the growth of economic sectors on a quarterly basis, based on feedback received from sectoral industry associations, shows that while a majority of the sectors are still continuing to witness 'moderate' growth rates of ( 0 to 10 per cent) with 'excellent' (>20 per cent) and 'high' (10-20 per cent) growth limited only to few sectors, there has been a sharp decline in the share of sectors registering 'low' growth of (<0 per cent).

According to the Survey, out of the 102 sectors surveyed, the share of sectors registering 'Excellent' growth of >20 per cent has remained constant at 9.8 per cent (10 out of 102) witnessed in the same quarter a year ago period. However, the share of sectors witnessing 'high' growth of 10 to 20 per cent has surged substantially to 20.6 per cent (21 out of 102) as against 10.8 per cent (11 out of 102) recorded in the same quarter previous year.

At the same time, the share of sectors witnessing 'moderate' growth of 10 to 20 per cent has witnessed a marginal decline to 45.1 per cent (46 out of 102) in the January -March FY16 from 49.0 per cent (50 out of 102) during the corresponding period a year ago. The number of sectors recording 'low' growth has declined significantly to 24.5 per cent (25 out of 102) in Q4 FY16 from 30.4 per cent (31 out of 102) in the same quarter previous year.

A further analysis of the sectors at the aggregate level (with industry being classified into broad segments in terms of performance of production viz excellent and high (above 10 percent) on one hand and moderate or negative (below 10 percent) on the other) reaffirms our perception that there are improvements on the ground. This is evident from the fact that the number of sectors showing excellent and high growth have shown some improvement in the Q4FY16 with around 75.3 per cent of sectors recording positive growth in Q4FY16 as compared to 69.8 per cent in Q4FY15.

An analysis of growth trends on a sequential quarter-on-quarter basis also presents improvements in the growth trends in Q4FY16 as compared to the Q3FY16. According to the Survey, while there has been a marginal increase in the percentage of sectors reporting 'excellent' growth, there has been a substantial surge in the share of sectors reporting 'high' growth. The share of sectors reporting high growth has increased to 20.6 per cent (21 out of 102) share in Q4FY16 from 6 per cent (6 out of 100) in the previous quarter.

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