Worse, some even slipped in July, signalling a roller-coaster recovery ride ahead, rather than a steady and quick one, amid more and longer localised lockdowns.
From the deep lows in the complete-lockdown month of April, several high-frequency economic indicators suggested a smart recovery and retrieval of considerable lost ground in May-June, but haven’t made much headway since. Worse, some even slipped in July, signalling a roller-coaster recovery ride ahead, rather than a steady and quick one, amid more and longer localised lockdowns.
The sharp spike in Covid-19 spread, leading to re-imposition of lockdown curbs in key industrial areas and urban centres, seems to have put the brakes on an incipient revival process in many industries, including the manufacturing sector. The slowing of the recovery has also to do with the fact that sectors such as hospitality, restaurants, tourism and aviation haven’t really come out of the woods ever since the pandemic broke out.
A contraction in manufacturing exacerbated in July, having recovered in each month until June following a record fall in April. The manufacturing Purchasing Manager’s Index touched 46 in July, compared with 47.2 in June, 30.8 in May and 27.4 in April, while a sub-50 print suggests contraction.
Diesel sales, a proxy of business and commerce, dropped 13% in July from the previous month and were down 21% year-on-year, forcing oil refiners to slash throughput.
Daily railway freight volume, another close proxy of internal trade, recovered from the April trough of 2.2 million tonne (mt) to 2.7 mt in May, and further to a near-normal 3.1 mt in June, but slipped to 3 mt in July.
The number of goods and services tax e-waybills increased week-on-week since early May, but after jumping from less than 3 lakh/day in April to a level of 14 lakh/day in June, the number hovered around 14-15 lakh/day till July 20. Merchandise exports were down 12% year on year in July (the same level as in June), while these witnessed a record 60% crash in April, and the contraction narrowed to 37% in May.