NewsSociety of Indian Automobile Manufacturers (SIAM) has reported the decline of almost 16% in total automobile industry sales in April, from a year earlier
Significance of decline
- The decline in demand is an indication that consumer demand across markets - urban and rural, institutional and individual – is contracting
Another indicator of a slowdown
- The Index of Industrial Production (IIP) for March shows output fell 0.1% from a year earlier to a 21-month low
- The capital goods sector shrank by 8.7% on the back of an 8.9% contraction in the preceding month.
- The output of consumer durables fell 5.1% from a year earlier, and growth in consumer non-durables production slid to 0.3% from the 14.1% pace in March 2018.
- Overall Manufacturing the sector’s growth slowed to 3.5% in the last fiscal, from 4.6% in 2017-18.
Factors which may enhance slowdown in the near future
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- The trade war between US and China
- Rising tensions in West Asia which may push up energy costs from the top oil-exporting region
- The distress in the farm sector if the monsoon does turn out to be “near normal”