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Trade activity, corporate order books and producer prices have rebounded sharply from their coronavirus lockdown trough, according to Bloomberg data.
India’s economic activity showed signs of stabilizing in November, even as concerns over further outbreaks of the virus and a new strain in the UK mount amid news of vaccines fueling hope.
All eight high-frequency indicators tracked by Bloomberg News were stable last month, keeping the needle on a dial measuring so-called “animal spirits” unchanged at 5. The level was reached using the three-month weighted average for smooth. volatility of monthly readings.
So far, the pace of activity has been enough for the country’s central bank to revise its forecast for the economy, which it now expects to emerge from a recession in the current quarter through December.
[Bloomberg]Commercial activities
Activity in India’s dominant service sector grew for a second consecutive month in November, but at a slower pace. The Markit India Service Purchasing Managers Index stood at 53.7 last month from 54.1 in October, with a reading above 50 indicating expansion. IHS Markit, who is leading the survey, said the level of positive sentiment has climbed to its highest since February amid forecasts that conditions will normalize once a vaccine is rolled out.
[Bloomberg]
Manufacturing activity lost some of the momentum seen in recent months and, as a result, pushed the composite index down to 56.3 in November, from 58 a month earlier. The manufacturing and service sectors have come under heavy price pressure, a factor that is likely to prevent the inflation-targeted central bank from rushing back to interest rate cuts.
Exports
Exports lost momentum last month, falling 8.7% in November from a year ago as trading partners were hit with new restrictions amid a second wave of Covid infections. 19. Exports of gems, jewelry and engineering products were a drag, although a deeper decline was halted by healthier shipments of medicines and pharmaceuticals as well as agricultural products. Imports have been weak, demand for capital goods still moderate, and remains a possible source of concern.
[Bloomberg]Consumer activity
Sales of passenger cars, a key indicator of demand, were up 4.7% in November compared to a year ago, although the pace was slower than what was seen as the market approached. festival of lights in India – Diwali. Overall retail sales reported a pickup in demand, even though they were 44% lower than a year earlier, according to ShopperTrak.
India’s retail sales picked up pace in November but remain well below their 2019 levels [File: Dhiraj Singh/Bloomberg]
Demand for loans resumed from the lows observed in October. Data from the central bank showed credit increased by more than 5.5% in November from a year earlier, higher than the 5.1% growth seen in the second half of the previous month. Liquidity conditions were broadly stable last month.
[Bloomberg]Industrial activity
Industrial production rose 3.6% in October from the previous year. The production of capital goods, which had declined for several consecutive months, rose 3.3% from the previous year, as did durable and non-durable consumer goods.
Production in infrastructure industries fell 2.5% in October from a year ago. The sector, which accounts for 40% of the industrial production index, contracted from a record 37.9% in April. Both data are published with a one month delay.
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