Industry has bottomed out but no clear recovery signs: Nomura

Leading brokerage house Nomura India today played down the marginal 0.4 percent contraction in the September factory output numbers, saying the industrial cycle has bottomed out.

Blaming the decline in output to a larger-than-expected dip in capital goods and a major weakness in consumer goods segments, Nomura said, "On a three-month moving average basis, industrial output growth rose to 0.5 percent year-on-year in September from a trough of -0.7 percent in May.

The government earlier in the day said industrial output growth contracted by 0.4 percent year-on-year. Reuters

"Therefore, notwithstanding the monthly volatility, the industrial cycle appears to be bottoming out, though there is no clear recovery yet due to weak exports, lacklustre investments, amidst signs of moderation in consumption demand," Nomura India Chief Economist Sonal Varma said in a note today.

The government earlier in the day said industrial output growth contracted by 0.4 percent year-on-year in September, lower than August's 2.3 percent expansion and sharply below expectations of over 2.5 percent.

Varma said the ongoing rebound in imports suggests that supply-side constraints and high cost of domestic production may be leading to greater import substitution, dragging on industrial production and worsening trade deficit.

"As such, the continued sticky nature of inflation remains the pre-dominant concern."


Updated Date: Dec 20, 2014 14:08 PM

Also Watch

Watch: Firstpost test rides the new Thunderbird 500X in Goa and walks you through the Royal Enfield Garage Cafe
  • Tuesday, April 17, 2018 Varun Dhawan on Shoojit Sircar's October, 5-star reviews and working with Anushka Sharma in Sui Dhaaga
  • Saturday, April 14, 2018 Ambedkar Jayanti: Re-visiting Babasaheb's ideals exposes fake Dalit politics of Rahul Gandhi and Congress
  • Monday, April 9, 2018 48 hours with Huawei P20 Pro: Triple camera offering is set to redefine smartphone imaging
  • Monday, April 16, 2018 Rajyavardhan Singh Rathore interview: Sports can't be anyone's fiefdom, we need an ecosystem to nurture raw talent

Also See