Festivals bring hopes for market

Jubilee News Desk

Festivals bring cheers to the people and this time it has had a special reference for the markets too. The markets, particularly the industries dependent upon production and sale had pinned hop upon the festivals and their hopes were responded – particularly consumer goods.

The industrial production index rose by 0.2% in September 2020 as compared to this month last year. This was the first month since the lockdown when the index reported growth. The rate of growth was pale and the index also benefitted from its low base of September 2019, when it had contracted by 4.6%.

September 2020 was the best month in terms of industrial production during lockdown. The manufacturing index nearly touched its year-ago level in September. At a growth of 0.6% it alleviated its rate of contraction substantially from 7.9% in August 2020. Among 23 manufacturing sub-groups, 10 reported a growth in production in September.

This proportion was quite thin during June-August 2020 with only 2 out of 23 sub-groups reporting a y-o-y growth. In May 2020, only one sub-group had reported a growth and in March-April 2020 none had managed to report a growth.

The products that grew were mainly consumer goods. Consumer goods production index grew by 3.6% in September, this year, according to a cmie report. Production of non-durable consumer goods grew by 4.1% and durable consumer goods grew by three per cent.

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This near three per cent growth in consumer non-durables output is a positive sign for the economy as demand for durables and consequently their production was contracting since May 2019.

The lockdown made the situation worse by aggravating the rate of fall from 7.8% during June 2019-February 2020 to 45.5% during March-August 2020. The growth in production of consumer durables in September 2020 was driven by high-end discretionary items such as automobiles, washing machines, electrical home appliances, computers and peripherals and wooden furniture.