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    Economy getting back on its feet? 8 indicators that show how trends are shaping up post-coronavirus

    Synopsis

    After the unlocking began, economic indicators have been showing signs of improvement. For instance, companies' profits grew 26% versus an estimated -2.1% decline. Operating profits also came in above expectations while operating margins also continued to expand.

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    A favourable balance of payments position have led to the build up in forex reserves in recent months.
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    Several economic indicators are showing a marked improvement from recent lows, which suggests the economy is getting back on track.

    ET Wealth provides a snapshot of how key economic trends are shaping up post-Covid.

    The increase in GST collections reflects the higher levels of economic activity being undertaken and business picking up with the easing of various restrictions.
    gst-collection
    NOTE: At Rs 5.59 lakh crore, total GST collection during April-October 2020 is still 20% lower than the Rs 7.01 lakh crore collected in the corresponding period of last year. Source: CARE Ratings

    • October witnessed an all-time high in eWay bill generation
    Number of eWay bills (641 lakh) generated last month were the highest in a month since the start of the eWay bill system. E-way bills represent movement of goods from one place to another after requisite tax payment.
    e-way-bill
    Source: Motilal Oswal Securities

    • Manufacturing index has climbed to its highest in a decade
    Indian companies ramped up production at the strongest pace recorded since late-2007 as demand picked up.
    PMI
    Source: Motilal Oswal Securities

    • Automobile dispatches are at an all-time high
    Auto sales (in terms of dealer dispatches) continued to improve in October 2020 as vehicle manufacturers hiked production in anticipation of strong sales during the ongoing festive season. Hyundai, Bajaj and Hero recorded highest ever sales in a month.
    automobiles
    NOTE: Retail sales (in terms of actual purchases) of automobiles for the month remain more than 20% lower compared to the corresponding month last year.

    • Sharp uptick in enrolments at EPFO
    Number of new EPF subscribers increased from 1.85 lakh in April to 6.70 lakh in August and exits from the subscriber base declined by more than 50%, from 5.71 lakh to 2.46 lakh during this period.
    EPFO
    NOTE: EPFO payroll data points to recovery in job market, but figures are provisional and subject to change. Additions to payroll may not always reflect new jobs created, as some existing jobs get formalised with growth of smaller organisations. Besides, EPFO data completely ignores the informal sector. Source: EPFO

    A healthy rise in exports coupled with easing of decline in imports saw the trade deficit fall since the turn of the year.
    trade-deficit
    NOTE: Exports during April-October 2020-21 have registered a decline of 19% over the same period last year. After 6% uptick in September, exports declined by 5.4% in October. Source: Ministry of Commerce & Industry

    • Forex reserves surge to record high
    A favourable balance of payments position—lower trade deficit and increased capital infl ows—have led to the build up in forex reserves in recent months.
    forex
    Source: RBI

    • India Inc beats earnings and margins estimates
    Companies' profits grew 26% vs estimated -2.1% decline. Operating profits also came in above expectations while operating margins also continued to expand.
    india-inc

    NOTE: Profitability and margins have expanded partly because of fall in input costs and reduction in wages and administrative expenses. Revenue growth remains largely subdued.
    Source: MOFSL | Above figures pertain to Motilal Oswal Securities coverage universe of stocks



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    14 Comments on this Story

    Sanujit Roy7 days ago
    Quite a few sectors under pressure as aviation, hospitality, auto, manufacturing, textile, real estate and retail
    Johnson K8 days ago
    Remember the pied Piper of Hamlin
    Some one is leading us into doomsday like the pied Piper. Six years have gone ache din still a non starter. But as the saying goes the path to hell is paved with gold. So the country is still hoping after hope, looking for all the green color, but sadly we are mistaking brown for green.
    Yashodhan Muzumdar8 days ago
    Evenbefore Covid Indian economy was shrinking. Still many activities are forbidden then how you expect the economy to shoot up. Many cities like Mumbai are facing rail and public transport. problems. 60% of restaurants are still closed.
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