Economic data: Pointing upwards - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Economic data: Pointing upwards

Sep 16, 2002

Continued positive signals from the economic data like strength in IIP index, strong growth recorded by commercial vehicles, cement shipments and buoyancy in tax collections indicate to a recovery. However, as the real impact of drought would only be palpable in the coming months, one would have to wait before building in high expectations. The IIP (Index for Industrial Production) posted a 6.4% growth for the month of July’02 as compared to 2.6% in July’01. The Index of Industrial Production grew by four per cent in June 2002. Given the poor growth rates observed offlate, a 6.4% growth in July certainly raises hopes of a recovery. The cumulative growth in the IIP during the first quarter of 2002-03 worked out 3.9 per cent. This was a substantial improvement over the 2.3 per cent growth recorded in the first quarter of 2001-02.

The performance of commercial vehicle industry, which can also be considered as a barometer for economic activity has improved significantly during the current fiscal year. During each month from May to July 2002, production recorded a sharp year-on-year growth. As a result, during April-July 2002, production registered a 34% growth as against 16% decline in the corresponding period of 2001. Both the segments of commercial vehicles have shown substantial improvement in production. Heavy and medium vehicle production grew by 34% per cent during April-July 2002 as against a 4.9% growth registered in the same period of 2001. Production of light commercial vehicles recorded 28% growth during April-July 2002, reflecting largely a recovery from 34% decline witnessed in the corresponding period of 2001.

Cement consumption in July 2002 was 8.9 m tonnes, 28% higher than consumption in July 2001. During April-July 2002, cement consumption grew by 13.4% as against a 0.2% decline recorded in the corresponding period of 2001. Healthy growth in consumption is largely attributed to the infrastructure projects and large scale construction of highways. The golden quadrilateral and North-South, East-West corridor projects continue to generate healthy demand for cement.

The capital goods industries also showing some signs of a slow turnaround. Growth in the first quarter of 2002-03 was 1.6%. This compares well with the six per cent decline in the corresponding quarter of 2001-02. Considering these numbers, one can conclude that the recovery is for real. However, the sustainablity of this recovery needs to be watched carefully in the following months. The real impact of the slow growth in agriculture, on the back of drought, may only be seen in the coming months.

Equitymaster requests your view! Post a comment on "Economic data: Pointing upwards". Click here!


More Views on News

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

ONGC to NMDC: Here are 5 Stocks Value Investors Should Closely Track (Views On News)

Nov 26, 2021

Before investing in value stocks, research the company and gain insight into why the market is discounting it.

Top 5 Stocks FIIs Bought and Sold Recently (Views On News)

Nov 25, 2021

FIIs have largely stayed on sidelines for the past few months, withdrawing money across emerging markets.

Do You Know Certain Less Popular Mutual Funds Can Help You Build Solid Wealth? (Outside View)

Nov 29, 2021

PersonalFN explains why you should not ignore less popular mutual fund schemes when you create your investment portfolio.

The Best Investing Strategy in a Market Crash (Profit Hunter)

Nov 29, 2021

We go back to the 2020 crash to find which stocks offer the best protection.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

Don't Sell these Stocks if the Market Falls (Profit Hunter)

Nov 17, 2021

These are the 3 types of stocks that you should not sell in a market crash.

How to Find Your Next 10-Bagger in this Market (Profit Hunter)

Nov 19, 2021

The #1 make or break factor in your portfolio you shouldn't ignore.

MobiKwik IPO Opens for Subscription Soon. Key Things to Know Before Subscribing. (Views On News)

Nov 20, 2021

The Rs 19 bn issue is set to hit the market soon.


Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Nov 29, 2021 (Close)