Industrial Output May Continue To Contract, Says SBI EcoWrap
While overall manufacturing activity will see some improvement in January, the country's industrial output may continue to contract at a pace of around 3-6 per cent, says the State Bank of India think tank. The latest SBI EcoWrap report says,
The yearly SBI Composite Index for January 2017 improved to 47, compared to last month’s (December 2016) index of 45.5. The monthly Index also increased to 50.9 in January 2017 from 49.4 in December 2016.
The SBI Composite Index is an indicator of manufacturing activity in the Indian economy, and aims to foresee the periods of contraction and expansion. The index has two indices, monthly and yearly, both of which help in assessing the country's manufacturing performance. The report said,
As per the index, we believe Index of Industrial Production growth may continue to contract in December 2016 and January 2017. As per the SBI Composite Index, the pace of contraction will be similar in December and January with a de-growth of between 3-6 per cent.
The think tank also assessed the performance of 138 companies that have declared their results for the third quarter of this financial year -- excluding those in banking, finance and refining sectors -- and saw an overall revenue growth of 3.3 per cent and a post-tax profit growth of 4.4 per cent.
"Contrary to expectations, consumers do seem to have countered the demonetisation saga," said EcoWrap, adding consumer sentiments in sectors like hotels and restaurants, travel agencies and packaging crossed the demonetisation bridge, possibly by increased usage of cards.
With inputs from IANS