Global Recovery Insights 2020 report published

are now clear indications of a smart recovery in some sectors like automobiles, FMCG, consumer durables and construction equipment.

The FMCG sector has been sequentially improving with each month looking better than the previous month and demand in semi-urban and small towns is estimated to be back at pre-COVID levels except in urban areas like Mumbai, Pune, Chennai, etc. where it is still picking up. A similar story is playing out in the consumer durables sector where demand is expected to grow by 20% by Q3. Consumer Durables sector is witnessing a strong demand, with double digits growth in August. Washing machines, refrigerators, TVs especially large TVs, kitchen appliances, lighting, etc. are all doing well However, supply side constraints may create challenges in meeting this demand if there are restrictions imposed on movement of goods and services. Paper board and Packaging sector, which mirrors the aggregate demand in the economy is back to about 90 % of pre-COVID levels. The retail is showing some interesting trends because even though footfalls have been low, the ticket size of purchases have gone up with the economy opening. The Automotive sector too is seeing a demand pick up. The Two/Three/Four Wheelers are doing relatively better in August with the Four-wheeler segment witnessing a 15% growth in August. Tractor sales in the month of August have been extremely good - the industry, which is a large contributor to the GDP, has been able make up for lack of sales in April and May.

Most high-frequency data points have shown a continued normalisation in activity levels in September 2020. The most promising sign is the turn-around in outbound shipments for the first time in seven months with merchandise exports expanding by 5.3% in September as per the provisional official trade data. In addition, weekly vehicle registrations continue to increase on a year-on-year basis in September, while weekly CMIE unemployment rate has continued to decline and is now below the pre-lockdown levels. Google mobility indicators have also improved with a rise in workplace-related and grocery/pharmacy trips. The news of the first advance estimates of kharif crop topping a record 144.5 million tonnes has also brought much cheer.

According to CII the Governments both at the centre and State would need to focus on livelihoods in addition to lives and hence efforts need to be made to stall the practice of sudden and adhoc lockdowns announced by States as well as districts. These not only further disrupt the revival of economic activities but also do not yield the desired results on lives either.