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Economists at the country's largest lender, SBI, today said they see India's Q2 real GDP growth slowing down further to 6.5% in the September quarter of this fiscal year. Amid concerns over the country's economic growth rate and whether it is slowing down, the analysts said they expect FY25 growth to come "closer to" 7%. SBI analysts join a long line of agencies like Fitch, ADB, IMF, Moody, World Bank, S&amp;P, and even RBI in forecasting India's GDP growth for FY25 in the range of 6.8% to 7.2% for FY25, driven by robust consumption and investment. SIP inflows have been at an all-time high, and so has QIP (qualified institutional placement) fundraising. As many as 71 companies raised Rs 88,678 crore this year through QIPs. Activity in Indian primary markets also remained robust, with 78 mainboard IPOs in 2024; this is a 111% rise from just 38 listings in FY23. Between April and June 2024, India's real GDP grew by 6.7%, the lowest growth seen in 15 quarters, pushing experts to believe that India is caught in a cycle of slowdown. "There is some incipient pressure evident on the domestic economy. Based on our analysis of 50 meaningful leading indicators (both consumption and demand-centric), a dip looks plausible across select cohorts of agriculture, industry, and services in Q2," the <keyword id="22337294" type="General" weightage="20" keywordseo="SBI-economists" source="keywords">SBI economists</keyword> added. Stating that they track 50 indicators to gauge economic activity, SBIs note said the proportion of indicators showing acceleration declined to 69% in Q2 FY25, as against 80% in Q2 FY24 and 78% in Q1 FY25. However, things might be changing now, given that rural demand has started looking up amidst muted urban demand. SBI also explained that the ongoing regulatory tightening on unsecured lending and roadblocks that are hindering rollover/refinancing of debt through unsecured credit are dismantling the unwarranted exuberance that had built up post-pandemic, especially in the urban areas. Madhu Lunawat, CIO &amp; Fund Manager, Bharat Value Fund states that the overall investment environment remains strong due to favorable economic conditions supporting government policies &amp; reforms. "The sustainable inflow from domestic investors is going to support the Indian equity market in any kind of correction. The long-term bullish structure of Indian economy will continue to attract new domestic &amp; global investors to participate in India’s growth story through various Investment avenues.” <h2>Rate cuts not on cards</h2>RBI Governor Shaktikanta Das clarified today that changing the monetary policy stance to 'neutral' does not mean a rate cut is imminent in the central bank's next policy announcement. Notably, RBI MPC is set to meet between December 4 and 6, 2024, to decide if the prevailing repo rate of 6.5%, which has stayed unchanged for the last 2 years, should be brought down or not. In its last meeting, The <keyword id="20501100" type="General" weightage="20" keywordseo="RBI-monetary-policy" source="keywords">RBI monetary policy</keyword> committee had shifted its stance to 'neutral' indicating that it is open to adjusting interest rates based on economic conditions. "It should not be assumed that we have done this, so therefore the next step is a rate cut. A change in stance doesn't mean that the next step is a rate cut in the very next meeting. It's not so," Das said. Das also cautioned that inflation remains a key factor, and inflation and CPI prints for October are expected to stay high.

SBI economists see Q2 GDP growth slowing down to 6.5%; FY25 growth to be closer to 7%

In a rather dampened <keyword id="19915531" type="General" weightage="20" keywordseo="forecast" source="keywords">forecast</keyword> for the Indian economy, <keyword id="19908266" type="General" weightage="20" keywordseo="ICRA" source="keywords" meta.keywordsubtype="org" meta.entityname="ICRA" meta.hostid="261" meta.entityid="ICRA">ICRA</keyword> has forecast a sharp <keyword id="20637625" type="General" weightage="20" keywordseo="slowdown" source="keywords">slowdown</keyword> in India's <keyword id="19972825" type="General" weightage="20" keywordseo="GDP-growth" source="keywords">GDP growth</keyword>. The credit rating agency has projected a year-on-year expansion of 6.0% in <keyword id="22106354" type="General" weightage="20" keywordseo="Q1-FY2025" source="keywords">Q1 FY2025</keyword> — the lowest in the last six quarters. In Q4 FY2024, India recorded an impressive 7.8%. The Reserve Bank of India had expected the growth momentum to continue this financial year as well. Earlier this month, the RBI governor had projected a 7.1% growth in Q1, while the growth rate for the entire financial year FY2024-25 was projected to be at 7.2%. The central bank had attributed this potential robust growth to improved agricultural activity, sustained buoyancy in services activity, healthy balance sheets of banks and corporates, thrust on capex by the government, visible signs of pick up in private investment, and improving prospects of global trade. However, RBI’s growth projections for this financial year were slightly moderated due to lower-than-anticipated corporate profitability, general government expenditure, and core industries output. As per ICRA, the sharp drop in GDP growth is primarily due to parliamentary elections and a contraction in government capital expenditure weakening urban consumer confidence. Another main cause could be the weakening urban consumer confidence, which reported a surprising downtick in the May and July 2024 rounds of the Central Bank’s Consumer Confidence Survey. “The lingering impact of last year’s unfavourable monsoon and an uneven start to the 2024 monsoon prevented a broader improvement in rural sentiment. Lower volume growth combined with diminishing gains from commodity prices weighed upon the profitability of some of the industrial sectors. The heat wave also affected footfalls in various service sectors, even as it provided a significant boost to electricity demand,” said Aditi Nayar, Chief Economist at ICRA. Despite the Q1 slowdown, ICRA expects economic activity to pick up in the latter half of FY2025, projecting an overall GDP growth of 6.8% for the full year, with a potential to exceed 7% in the second half. The agency expects decelerated growth in Gross Value Added (GVA) as well, easing to 5.7% in Q1 FY2025 from 6.3% in the previous quarter. This slowdown is primarily attributed to a decline in industrial growth, which is predicted to moderate to 6.4% from 8.4%, along with slight reductions in the services sector's growth and a modest improvement in agricultural GVA. The difference between GDP and GVA growth is expected to narrow to around 30 basis points (bps) in Q1 FY2025, down from 148 bps in the previous quarter, due to lower growth in net indirect taxes amid a rise in government subsidies. ICRA's analysis indicates that industrial GVA growth is likely to moderate in Q1 FY2025, with a slowdown in manufacturing and construction offset by growth in electricity, mining, and quarrying. Additionally, a contraction in government and state capital expenditure, along with a significant drop in new project announcements, has contributed to the overall slowdown. Manufacturing profit margins have also been under pressure due to rising global commodity prices and narrowing deflation in input costs, which, combined with slower growth in manufacturing output, suggests a deceleration in manufacturing GVA growth. In the agricultural sector, GVA growth is projected to be modest at 1.0% in Q1 FY2025, amidst declining output from most rabi and summer crops and a deficient rainfall in June 2024. With growing concerns around inflation and unemployment in India and across the world, the latest forecast could further fuel the fears around recession and slowdown in major economies. However, a much clearer picture will emerge with the actual quarterly estimates of GDP for Q1 from the National Statistical Office (NSO) next week. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/digital-initiatives-to-triple-indian-retail-borrowing-to-usd-2-5-trillion-by-2030-sp-global/articleshow/112263945.cms" data-type="tilCustomLink" target="_blank">Digital initiatives to triple Indian retail borrowing to USD 2.5 trillion by 2030: S&amp;P Global</a>

ICRA forecasts slowdown in India's economy: GDP growth expected to hit six-quarter low in Q1 FY2025

Demand trajectory across urban and rural markets in India has shown a "slight improvement" sequentially in the March quarter, although it falls short of a full recover, FMCG major Dabur said. Despite near-term consumption pressure, some "green shoots" are emerging such as moderating inflation, improving consumer confidence and increase in government spending. "While urban markets have returned to positive volume growth, rural markets still remain muted," said Dabur in its latest quarter updates. The company expects a "mid-single digit revenue growth" for the January-March quarter in such a scenario. Its F&amp;B business continues to trend at robust levels and will report strong double-digit growth, while healthcare portfolio is expected to be in a positive growth trajectory, it added. Home &amp; Personal Care (HPC) will report low single-digit revenue growth on account of a slowdown in the personal care categories. "Our brands continued to record gain in market shares in most of the segments," it said. March quarter also marks the consolidation of Badshah Masala, a business which it acquired. It is in the process of being integrated and is tracking as per expectations. Over international sales, Dabur said it expects "high single-digit growth" in constant currency. "However, due to currency headwinds in Egypt and Turkey, the reported growth in INR will be impacted. While there are short-term pressures, we are restructuring our distribution network in key markets and increasing investments behind our brands which will benefit us in the long term," it said. "Overall, Dabur's consolidated revenue is expected to report mid-single digit growth during the quarter," it said. During the quarter inflation continued to cool off for most of our commodities. "India gross margins are expected to show an improvement, but Consolidated gross margin will be impacted mainly due to currency headwinds in International Business. We have also strategically increased our spending behind our brands, leading to short-term pressure on the operating margin, which is expected to be lower by around 200-250 bps as compared to Q4 FY22," it said. While the environment has been challenging, the fundamentals of the business continue to be resilient. "We will continue to invest strongly behind Power Brands, Innovation, Distribution expansion and a robust back end which will enable us to increase our market shares and achieve profitable and sustainable growth," it said. This quarter update will be followed by detailed financial results and earnings presentation once the Board of Directors of the Company approves the consolidated and standalone financial results. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/monetary-policy-impact-rbis-pause-to-support-real-estate-demand-particularly-affordable-segment/articleshow/99290486.cms">Monetary Policy Impact: RBI’s pause to support real estate demand - particularly affordable segment</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rbi-revises-indias-fy24-growth-outlook-expects-softer-inflation-on-the-back-of-lower-commodity-prices/articleshow/99290005.cms">RBI revises India’s FY24 growth outlook, expects softer inflation on the back of lower commodity prices</a>

Demand trajectory slightly improves sequentially in March qtr, green shoots emerge, says Dabur

<ul><li>Consumption gaps between urban and rural markets narrowed down in the December quarter, for the first time in 2023.</li><li>Modern trade saw double-digit growth in consumption, but growth in <keyword id="20479724" type="General" weightage="20" keywordseo="traditional-trade" source="keywords">traditional trade</keyword> slipped sequentially.</li><li>Non-food category volumes grew sequentially but that of food slowed down, led by staples and impulse categories. </li></ul>Even as FMCG sales growth has been moderating on a sequential basis, sales of noodles and biscuits saw an uptick in the rural markets in the December quarter, says a NielsenIQ report. Rural markets too saw a sequential-quarterly decline, but consumption gaps between urban and rural markets narrowed down for the first time in 2023, in the December quarter. The North and West regions contributed to this phenomenon, the report says. “Despite a sequential-quarter decline, the rural recovery narrative continued to evolve throughout the year. In Q4 2023, we observe an uptick in consumption, primarily driven by habit-forming categories (such as biscuits and noodles) in food and essential home products. These categories have thrived despite flat to negative price growth, indicating resilience and sustained demand,” said <keyword id="20476060" type="General" weightage="20" keywordseo="roosevelt-dsouza" source="keywords">Roosevelt Dsouza</keyword>, Head of Customer Success – India, <keyword id="20475890" type="General" weightage="20" keywordseo="niq" source="keywords">NIQ</keyword>. The rural areas are also seeing a growing preference for larger packs, while urban markets see a persistent preference for larger packs, the report said. It says that the FMCG industry experienced a 6% growth in value, attributed to a 6.4% increase in volume. However, on a sequential basis, there is a moderation in consumption growth, it adds. The pricing growth in the overall fell to 2.7% in Q3, due to the price cuts taken across categories by FMCG majors to fight off competition. In the December quarter of last year, it was 10%, as per Nielsen data. FMCG major <keyword id="19948892" type="General" weightage="20" keywordseo="hul" source="keywords">HUL</keyword> said that in Q3, its volumes grew 2% in Q3, but its value growth fell marginally by 0.3%. Marico’s domestic volumes grew 2% during the quarter, with a flat value growth. <keyword id="20021294" type="General" weightage="20" keywordseo="kirana" source="keywords">Kirana</keyword> continue to suffer Modern trade which consists of supermarkets, hypermarkets and such has seen a double-digit growth in consumption at 16.8%. Traditional Trade which consists of kiranas or mom-and-pop stores saw a 5.3% growth in consumption, falling from 7.5% in the Q2 of FY24. “Despite certain challenges, the positive momentum in modern trade adds a promising dimension to the overall market scenario,” Nielsen says. Non-food categories grow faster The volume growth in general is also much faster for non-food categories. Though more units were purchased in food categories compared to the same period last year, non-foods saw more large packs being purchased. The volume growth in the food sector was at 5.3% YoY, but it was at 8.7% in Q2 of FY23. This slowdown in growth is primarily due to staples (such as refined and non-refined edible oils, etc.) and impulse categories such as confectionery. In non-food categories, volumes grew at 9.6% in Q3 FY24 — higher than the 8.7% recorded in Q2. This improvement can be attributed to an increase in rural consumption growth, with a growth rate of 9.8% (vs. 6.7% in Q2), Nielsen says. “Volume growth is attributed to home care products like detergent cakes and bars, washing powder; and personal care like toilet soaps categories in rural areas,” the report said. In urban areas, the non-food sector is witnessing slower consumption growth, with a growth rate of 9.4% in Q3, slightly down from 10.4% in Q2.

Amidst slowdown, noodle and biscuit sales see an uptick in rural areas

<ul class="summary-list"><li>Economists surveyed by the <keyword id="815085" type="ORGANIZATION" weightage="60" keywordseo="Urban-Land-Institute">Urban Land Institute</keyword> see home price growth elevated through 2023 albeit slowing.</li><li><keyword id="35061" type="ORGANIZATION" weightage="60" keywordseo="housing">Housing</keyword> starts will rise to their fastest rate since 2007 but still fail to meet demand, ULI said.</li><li>Elevated lumber prices have curbed building and could spark a housing affordability crisis.</li></ul>Prospective buyers waiting for the <keyword id="189423" type="PERSON" weightage="60" keywordseo="housing-market">housing market</keyword> to cool down shouldn't hold their breath.Home-price inflation will slow from last year's peak of 11.4% but remain elevated as the market boom charges forward, according to economists surveyed by the Urban Land Institute in May. The estimates for average price growth in 2021 and 2022 were revised higher to 8.1% and 5%, respectively, and price growth is forecasted to reach 4% in 2023, landing just below the country's 20-year average but still outpacing broader inflation measures.ULI, which calls itself the world's oldest and largest network of <keyword id="6354553" type="COMPANY" weightage="60" keywordseo="real-estate">real estate</keyword> and land experts, surveyed 42 economists and analysts across 39 real-estate organizations from April 23 to May 7. Some of the inflation slowdown will be driven by a rebound in home supply, according to the survey. US home inventory tumbled to a record low in fall 2020 and has since retraced only a portion of the decline. And while housing starts surged in March, elevated lumber prices and lot shortages <a href="https://www.businessinsider.com/us-housing-market-starts-april-homebuilders-lumber-real-estate-boom-2021-5">dragged on starts in April</a>.Economists see single-family starts climbing to an annualized rate of 1.1 million by the end of this year and reaching 1.2 million in 2022 and 2023, according to ULI. That compares to an average rate of 990,500 starts through 2020 and 1.1 million in April.While housing starts already exceed the 20-year average of 942,000, inventory will fall short of the country's massive demand. Estimates of population growth, demographic change, and demolitions suggest about 1.3 million households will form annually for the next few years, Goldman Sachs analysts said in a May note.Millennials are just reaching peak homebuying age and set to keep demand strong for the foreseeable future. Elevated lumber prices and lot shortages will continue to drag on construction even as starts accelerate. And while mortgage rates have risen from their pandemic-era floor, they still sit at historically low levels and should keep demand robust, the bank said."The resulting picture is one of a persistent supply-demand imbalance in the years ahead," Goldman economists led by Ronnie Walker added.And even if construction is to trend at 1.1 million this year, a handful of obstacles need to be cleared. Lumber prices remain at historic highs even after falling for seven days straight. Bottlenecks that lifted lumber costs <a href="https://www.businessinsider.com/housing-market-outlook-shortage-lumber-costs-homebuilders-price-inflation-supply-2021-5">have since bled into construction</a>. About 47% of builders added escalation clauses to contracts last month, allowing them to lift selling prices to offset higher costs. Nearly one-fifth of contractors said they're delaying building or sales entirely, possibly waiting for lower costs to improve profitability.The construction industry will also need to convert vast amounts of land into buildable lots and, eventually, new units. The New Home Lot Supply Index fell to a record low in the first quarter, according to analytics firm Zonda. Separately, the number of approved homes that haven't yet been started climbed to the highest level since 1979 in April.Unless housing starts rebound from the April slump, the nationwide supply shortage risks leaving an entire generation in the dust as builders struggle to keep up.

Home prices will keep soaring through 2023 as construction will fail to meet demand, study says

New Delhi, Consumer demand is expected to stay low over the coming quarters, as inflation continues to rise, creating a further slowdown phase for the startups in the country, a new report has said. There is an ongoing risk of further escalation in the war on Ukraine and the current wheat crop being impacted by hot weather conditions, according to market research firm <keyword id="3359665" type="General" weightage="20" keywordseo="redseer" source="Orion">Redseer</keyword> <keyword id="9903214" type="General" weightage="80" keywordseo="strategy-consultants" source="Orion">Strategy Consultants</keyword>. Consumer perception of the general economic condition continues to be pessimistic as per the <keyword id="6354335" type="General" weightage="80" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword>'s <keyword id="1961413" type="General" weightage="80" keywordseo="consumer-confidence-survey" source="Orion">Consumer Confidence Survey</keyword> of January 2023, where more than 50 per cent of consumers reported it to have worsened. This comes at a difficult time for startups. They currently have limited ability to drive growth through discounts and other levers, which worked well during an easier funding environment. "Therefore, startups must focus on efficient unit economics and improving profitability by sticking to their core offerings," the report said. One strategy that has worked for FMCG players in the face of shrinkflation has been the push towards smaller stock-keeping units (SKUs). "Bharat-focused startups, too, need to look at revamping their <keyword id="6625639" type="General" weightage="80" keywordseo="sku" source="Orion">SKU</keyword> strategy to fit the tighter wallets of the mass-market consumers. The second strategy is to double down on the premium categories, which have lower price elasticity and have performed well against market pressures across sectors," the findings showed. The market disruption by the Covid-19 pandemic created phases of growth and slowdowns for startups. As a result, most businesses experienced a net growth that spanned two pandemic waves. However, in 2022, global inflationary pressures severely impacted consumer demand. The revenue increase was driven by higher prices, as volumes remained low across the urban and rural sectors. "With the macroenvironment challenges expected to continue, consumer demand is likely to remain subdued for the foreseeable future," the report said. "We expect consumer demand over the near future to continue staying subdued, with high inflation, unemployment in the urban organised sector and falling real wages in the rural areas," it added. SEE ALSO: <a href="https://www.businessinsider.in/tech/mobile/news/xiaomi-13-pro-vs-oneplus-11-price-specs-and-features-compared/slidelist/98264176.cms">Xiaomi 13 Pro vs OnePlus 11 – price, specs and features compared</a> <a href="https://www.businessinsider.in/tech/gadgets/news/noise-and-fire-boltt-entered-in-top-five-in-global-smartwatch-shipments/articleshow/98171390.cms">These two Indian brands have together sold more smartwatches than Samsung in 2022</a> <a href="https://www.businessinsider.in/tech/gadgets/news/four-out-of-five-wireless-earbuds-sold-in-india-in-2022-were-from-an-indian-company/articleshow/98141414.cms">Four out of five wireless earbuds sold in India in 2022 were from an Indian company</a>

Tough times for Indian startups as consumer demand expected to stay low: Redseer

<ul><li>Demand for gold in <keyword id="3658" type="General" weightage="80" keywordseo="india" source="Orion">India</keyword> during the September quarter of the current calendar year grew by 14% year-on-year. </li><li>The healthy demand for jewellery in India can be attributed to a sharp pick-up in economic activity, with a 17% year-on-year increase in tonnage terms. </li><li>Recovery in <keyword id="6379337" type="General" weightage="20" keywordseo="gold-jewellery" source="Orion">gold jewellery</keyword> demand was primarily driven by urban India, more specifically southern parts of the country. </li></ul>India’s love for gold continues to remain strong, with both jewellery and investment demand growing in double digit in the September quarter of this year. According to the <keyword id="113718" type="General" weightage="100" keywordseo="world-gold-council" source="Orion">World Gold Council</keyword>’s quarterly report, demand for the yellow metal in India during the September quarter of the current calendar year grew by 14% year-on-year at 191.7 tonnes. In value terms, gold demand was ₹85,010 crore, up by 19% as compared to the corresponding quarter last year. For the full year, the World Gold Council expects demand for the yellow metal to average around 750-800 tonnes, which is similar to last year. The demand for gold continues to remain strong from central banks despite the drop in prices through 2022, as the dollar strengthened against all other currencies. The strength of the dollar has impacted values of asset classes and gold is just one of them. In India, the demand for ornaments has made a strong comeback this year after weakness in demand post-Covid. According to Somasundaram P R, regional CEO- India, World Gold Council: “India's total gold demand in Q3 2022 at 191.7 tonnes is a 14% increase over last year. This reflects better-than-expected performance and strong consumer interest, helping year-to-date demand return to pre-Covid levels.” Recovery in gold jewellery demand was primarily driven by urban India, more specifically southern parts of the country. The healthy demand for jewellery can be attributed to a sharp pick-up in economic activity, with a 17% year-on-year increase in tonnage terms. <keyword id="6355185" type="General" weightage="50" keywordseo="rural-india" source="Orion">Rural India</keyword> which is a big consumer of gold, however, has not played a part in demand recovery thanks to the seasonal effect (monsoons) and inflation. Gold bars and coins also were in demand during this period and grew by saw a 6% year-on-year improvement to 45.4 tonnes, as retail investors responded to <keyword id="35271" type="General" weightage="20" keywordseo="gold-price" source="Orion">gold price</keyword> drop and weaker equity markets, and festivities around Ganpati and Puja festivals after two years of Covid, saw a huge uplift in consumer sentiment, says World Gold Council’s report. In India, total Investment demand during the September quarter was 45.4 tonnes, an increase of 6% in comparison to the corresponding quarter last year. In value terms, gold Investment demand in the September quarter was ₹20,150 crore, up by 10% from the previous year. Total gold recycled in India in Q3 2022 was 16 tonnes, down by 23% compared to 20.7 tonnes in 2021. <div type="image" title="World Gold Council" msid="95230409" hostid="261" sizebytes="56896"></div> Global trends in gold consumption Globally too the demand for gold as a store of value improved, but investors of gold exchange traded funds (<keyword id="6357062" type="General" weightage="50" keywordseo="etf" source="Orion">ETF</keyword>s) turned cautious. According to the World Gold Council report, retail investors bought gold as a store of value amid surging global inflation, while ETF investors reduced their holdings in the face of rising global interest rates. Demand for gold was also seen in the <keyword id="30350" type="General" weightage="50" keywordseo="middle-east" source="Orion">Middle East</keyword>, with Saudi Arabian jewellery consumption rising by 20% since Q3 2021, and the United Arab Emirates up 30% for the same period. Chinese jewellery demand also saw a modest 5% increase y-o-y driven by improved consumer confidence and a dip in the local gold price, prompting the release of some pent-up demand. Central bank buying too picked up during the quarter with estimated record purchases of nearly 400 tonnes in the third quarter. “Looking ahead, we anticipate central bank buying and retail investment to remain strong and that could help offset potential declines in OTC and ETF investment that may prevail if the dollar strength persists. We also expect to see jewellery demand continue to perform strongly in some regions such as India and <keyword id="53564" type="General" weightage="50" keywordseo="southeast-asia" source="Orion">Southeast Asia</keyword>, while the technology sector will likely witness further decline in the face of economic deceleration,” Louise Street, Senior Markets Analyst at the World Gold Council said. Gold continued to hold favour with retail investors who turned to gold for its status as a store of value against inflation and geopolitical uncertainty. Investors sought to hedge inflation with bar and coin investment, driving total retail demand up 36% y-o-y. This was supported by significant purchasing in Turkey (up 5x) and in Germany (up 25%). There were ‘visible contributions’ across all major markets, as per World Gold Council estimates. Mine production too was up 2% versus Q3 2021, with gold mining seeing its sixth consecutive quarter of growth. By contrast, recycling was 6% lower y-o-y in Q3, as consumers held onto their gold in the face of surging inflation and an uncertain economic outlook. “Despite a shaky macroeconomic environment, demand this year has reflected gold’s status as a safe haven asset, underscored by the fact that it has outperformed most asset classes in 2022,” said Louise Street. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/amid-risks-of-a-slowdown-these-it-companies-are-best-placed-to-survive-the-storm/articleshow/95228871.cms">Amid risks of a slowdown, these IT companies are best placed to survive the storm</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/news/40-of-indians-defrauded-while-shopping-online-during-festive-season/articleshow/95226063.cms">40% of Indians defrauded while shopping online during festive season</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/international/news/twitter-bosses-entitled-to-usd-122-million-in-golden-parachute-payouts/articleshow/95224235.cms">Twitter bosses entitled to USD 122 million in 'golden parachute' payouts</a>

Jewellery demand is now back to pre-pandemic levels: World Gold Council

<ul><li>Clothing which is a non-discretionary spending by rural population has gone down substantially. </li><li><keyword id="6590829" type="UNKNOWN" weightage="20" keywordseo="Rural-wage-growth">Rural wage growth</keyword> also plunged from 14.6% in 2013-14 to a mere 1.1% in 2018-19. </li><li>Due to the <keyword id="3345174" type="PERSON" weightage="20" keywordseo="Rural-Slowdown">rural slowdown</keyword>, biscuits as a category, is growing at a dismal 1%, says an Axis bank report. </li></ul>The ongoing slowdown is affecting rural and urban Indians differently. While urban Indians might be buying fewer cars and staying away from jewels, many basic essentials are vanishing from rural homes--be it biscuits, clothes and hair oil. Data shows that 833 million rural Indians have all but stalled buying clothes. “In the last one year the weighted contribution of clothing which is a non-discretionary item plunged from 39 bps in June 20118 to almost zero in June and July 2019, indicating demand slowdown,” says a report by SBI Ecowrap. Villagers are screwing caps on essentials as well. "The slowdown in hair oils is led by moderation in rural growth. The volume growth in the rural area is now at 4.8%,” said Sumit Malhotra, CEO of Bajaj Consumer after its first quarter earnings report. Rural consumption hit by wage decline The rural wages have not been growing at all. “The real rural wage growth plunged from 14.6% in 2013-14 to a mere 1.1% in 2018-19,” said SBI Ecowrap. Not only are villagers making less and spending less, their incomes are so low that savings are going down as well. <div type="javascript" title="Custom" contenttype="Video"><cdata><![CDATA[
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 This is a big blow for fast moving consumer goods companies as most have been betting on the rural market. As many as 65,000 villages contribute as much as half of overall of fast-moving consumer goods sales in India. Due to the rural slowdown, biscuits as a category, is growing at a dismal 1%, says an Axis bank report. ”Rural stress led to moderation of rural demand growth which peaked to around 1.5 times of urban growth few quarters back,” said a report by Aditya Birla Capital on FMCG sectoral review in the first quarter. Finance Ministry’s stimulus will take time to reach villages The government has started taking cognizance of slow growth across the country. And, the Finance Minister Nirmala Sitharaman has kicked off a slew of measures to kickstart the economy, and one of them being ₹70,000 crore capital to public sector banks, and rolling back on additional tax surcharge on investors that was imposed during the Budget. “We are cautiously optimistic on the rural, but we'll continue to steer the course on the strategy that we've defined for ourselves as far as rural is concerned. If the government spending and the stimulus reaches out the rural, then it will be great," said Mohit Malhotra, CEO of Dabur. However, for the stimulus to reach rural areas will be a long and arduous journey trickling from banks to non-banking financial institutions. This is unfortunate considering rural Indians are always the first to face the ill-effects of slowdown. See also: <div type="Article" hostid="261" msid="70766429" title="India’s biscuit crisis shows slowdown is hurting the poor more — and job losses are making it worse" mstype="2" mssubtype="0"></div>

After biscuits, Indian villagers are cutting down on clothes and hair oil too

The gross domestic product (GDP) figures for the three-month period of October to December 2018, came in today (Feb 28, 2019). The Indian GDP grew by 6.6%, the slowest in five quarters. In fact, even a growth of 6.6% seems to be on the optimistic side, given that this is not in line with the underlying economic fundamentals, which can be measured through high-frequency economic indicators like car sales, two-wheeler sales, tourist arrivals, railway freight movement, etc. Let’s try and get some sense of what the economic indicators looked like in the three month period between October to December 2018. In this piece, the yearly growth of 15 high frequency economic indicators has been looked at. These indicators include (and as can be seen from the accompanying table, which is in two parts) indicators like car sales, two-wheeler sales, commercial vehicle sales, non-oil exports, non-oil non-gold non-silver imports, revenue earning rail freight, among others. The performance of 11 out of the 15 economic indicators was much better during the period October to December 2017 than it was in October to December 2018. This basically means that the yearly growth of most economic indicators was better during the same period. In simple English, what this means is that the <keyword id="6356076" type="DEFINITION" weightage="20" keywordseo="indian-economy">Indian economy</keyword> has slowed down during the last quarter. Will this reflect in the government GDP numbers? That is something we will come to know later this week. These indicators are real time economic indicators and not a theoretical construct like the GDP number. Also, in a scenario where India grew by 8.2% during 2016-2017, the year of demonetisation, it makes more sense to trust real time economic indicators more than the GDP number declared by the government. Let’s take a closer look at some of these indicators. Take car sales, the most cited indicator among these indicators. During the period October to December 2018, car sales fell by 0.79% in comparison to October to December 2017. In fact, car sales had fallen by 2.42% during July to September 2018. 
 
 
 
 
 
 
 
 
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 Why are car sales important? That’s because they have been an important indicator of how urban India is feeling about its economic prospects. At the end of the day, no one is forcing an individual to buy a car. She buys a car only when she feels that she is in a position to service the EMI on the car loan taken to buy the car or make a down-payment. The fact that car sales have been falling tells us that urban India isn’t really feeling strong about its future economic prospects. Car sales also have very strong forward and backward linkages. When cars sell well, there is greater demand for steel, rubber, paint, glass, batteries etc. These are the backward linkages. A whole host of sectors do well, when cars sell well. The vice versa is also true. As far as forward linkages of car sales are concerned, a growth in car sales leads to an increase demand for loans, servicing centres as well as energy consumption. As we can see from the accompanying table, consumption of petroleum products went up by just 2.21% during the period October to December 2018, in comparison to a year earlier. This is again a clear impact of slowdown in car sales. 
 
 
 
 
 
 
 
 
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 Other than cars, a slowdown in scooter sales between July and December 2018, also tells us that urban India is not feeling too comfortable about its economic prospects. While scooter sales growth remained slow, the motorcycle sales growth seems to be on a recovery path. Between October and December 2018, it grew by 11.11%. 
 
 
 
 
 
 
 
 
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 This along with the fact that tractor sales during the same period grew by 22.24%, tells us that the rich part of rural India is feeling economically confident. The same cannot be said the agriculture sector as a whole, with fertilizer production falling 9.1% during the period. 
 
 
 
 
 
 
 
 
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 As far as consumer demand is concerned, non-oil non-gold non-silver imports, which are a very good indicator of consumer demand, grew by just 0.35% between October and December 2018. Tourist arrivals also grew by just 1.73%, in comparison to 14.81% a year earlier, which will act as a dampener on consumer demand. 
 
 
 
 
 
 
 
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 The production of steel grew by 4.64% during the period. A slowdown in car sales as well as a real estate sector which hasn’t gone anywhere in many years, went against the sector. 
 
 
 
 
 
 
 
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 What helped is the healthy pace of road construction. Between April and November 2018, 5,579 kilometres of highways were constructed, against 4,942 kilometres, during the same period in 2017. Road building also gave a fillip to cement production, which jumped by 13.33%. 
 
 
 
 
 
 
 
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 Exports remained weak during the period. Non-oil exports, which tend to benefit a large number of companies in comparison to oil exports, where the benefits are concentrated, grew by just 1.19%. Revenue earning rail freight saw a slight improvement in growth at 5.92%. Commercial vehicle sales grew by 6.7%, the slowest in six quarters. A fast growth in commercial sales indicates a robust activity on the infrastructure and industrial front. This is seen as a lead economic indicator of industrial as well as infrastructure activity. This is also borne out by data from Centre for Monitoring Indian Economy. During October to December 2018, the new projects fell by 24.14%. Completed projects fell by 8.35% and the stalled projects went up by 246.89%. All this comes together in the form of a major slowdown in central government revenue receipts, which grew by just 0.48% during the period, with the government also feeling the heat of the economic slowdown. All these economic indicators come together to tell us that the Indian economy has slowed down during the period October to December 2018. Whether this is captured in the GDP data which will be released on February 28, remains to be seen. In this scenario, even an economic growth of 6.6% doesn’t seem believable. In the recent past, the Indian GDP data has become more or less a joke. Let’s see if that continues or things do improve on that front. Vivek Kaul is a Business Insider India contributor. Kaul is an economist and the author of the ‘Easy Money’ trilogy. See also: <a href="https://www.businessinsider.in/india-corporate-earnings-will-slow-down-affecting-stock-prices/articleshow/68060649.cms">Indian companies have two tough years ahead — are the markets prepared?</a> <a href="https://www.businessinsider.in/indias-wholesale-inflation-cools-to-2-7-in-january/articleshow/67992193.cms">India's wholesale inflation cools to 2.7% in January</a> <a href="https://www.businessinsider.in/indias-government-wants-you-to-believe-that-demonetisation-didnt-slow-down-the-economy/articleshow/67785050.cms">India’s government wants you to believe that demonetisation didn’t slow down the economy</a>

Why even an economic growth of 6.6% is not believable

New Delhi, Jun 14 () Automobile dealers' body FADA fears that the coronavirus pandemic could result in job losses in dealerships which could be worse than what was experienced last year when over two lakh jobs were lost due to a prolonged slowdown in the automobile industry, according to a top federation official. The Federation of Automobile Dealers Associations (FADA), however, said a clear picture will emerge only after the end of this month when it will roll out a survey to understand how its dealer members are planning with regards to reduction of outlets and manpower. When asked if there is a fear that there could be bigger job losses in dealerships due to the COVID-19 impact than 2019 when the automotive industry was hit by a prolonged slowdown, FADA President Ashish Harsharaj Kale told : "Yes, if demand doesn't pick up. Obviously." Between May and July last year, the automobiles dealerships across the country shed around 2 lakh jobs to tide over the impact of an unprecedented sales slump. Kale, however, said, "To really understand the indication of what kind of job losses we are staring at (due to COVID-19), it will only be (possible) after this month. April and May have been completely under lockdown. You can't really gauge what is the demand situation (now)." He further said a clear picture is expected to emerge only at the end of this month in terms of how the pandemic has affected the economy, which market segment has been hit more -- urban or rural or a combination of both and whether it is the upper class or the middle class who have been hit harder. "We will get clarity only in June on what kind of demand situation is there for different kinds of vehicle categories. Only towards the end of June we will be rolling out a new survey to understand what kind of changes dealers are working with regarding reduction of outlets and manpower reduction," Kale said. He, however, asserted cutting jobs is the last option that automobile dealers resort to. "It is not easy for us to let go of our manpower as that is the most valuable resource. We train them over many years and they gradually rise through in our organisations. That is the last call we take. Inventory would be the first call we take and other variables expenses, manpower would be the last," Kale asserted. Therefore, he said, "It will be at least after a month of routine business that we see, based on which we will take a call. If demand doesn't pick up, there will be a reduction of manpower." When asked if there has been closure of any dealerships due to the coronavirus-induced lockdown, he replied in the negative. "There has been no closure of dealerships as yet. In the dealership business, as we are traders, the decisions are not so sudden. For us, one good thing is that the service business is slowly coming back. A dealer will not take a call so soon on whether he wants to exit his business or if he wants to survive based on the current demand and financials," Kale said. He further said, "We will get those indications in July. Manpower reduction, we will know by June-end because each and every dealer will assess the demand situation, how does he forsees what are the problems and he is facing and take a call." RKL HRS

COVID-19 may result in job losses in dealerships worse than last year's auto sector slowdown: FADA

<ul><li>The lockdown affected the <keyword id="6354553" type="COMPANY" weightage="20" keywordseo="real-estate">real estate</keyword> market, with constructions across the country coming to a complete standstill in the initial days. </li><li>However, with the country slowly opening up now, business is also slowly coming back.</li><li><keyword id="9497924" type="PERSON" weightage="20" keywordseo="pushp-raj-singh">Pushp Raj Singh</keyword>, President Marketing, <keyword id="193491" type="CITY" weightage="20" keywordseo="JK-Cement">JK Cement</keyword> Ltd. (Grey <keyword id="6378916" type="UNKNOWN" weightage="20" keywordseo="cement">Cement</keyword> Business) shares how the brand survived the lockdown days and how it made sure all its stakeholders were safe and taken care of.</li><li>He also tells us the growing relevance of digital for marketers like him to reach out to their target audience.</li></ul>As the government announced the country-wide lockdown in March this year, to contain the spread of Covid-19, construction work across the country came to a complete standstill. Supply chain systems were disrupted due to movement restrictions between districts and states. Moreover, over the past few months we have been watching migrant workers struggling to go back home. Most of the construction work is carried out by migrant labourers so even when the country is slowly unlocking, there is a shortage of workers in the sector. However, there are early signs of recovery, as pointed out by Pushp Raj Singh, President Marketing, JK Cement Ltd. (Grey Cement Business). He shared with us that construction activities have slowly started and the brand is witnessing good demand from rural areas. While the urban demand and projects are still subdued, there is hope that things will improve considerably in the next few months. Singh also talks to us about how the brand came up with strategies to keep its employees motivated during these adverse times when there was hardly any business. Excerpts: Q) Since the lockdown led to a complete halt in construction projects, what kind of business impact have you faced since the lockdown started? There has been a slowdown in the businesses all across. Supply chain system came to a standstill due to inter-district and interstate movement restrictions. Moreover, the movement of migrant laborers is a major concern from long-term business recovery point of view. It is also a reason the construction activities in urban and city markets have still not fully recovered even after the unlock process has started. However, at a time of uncertain socio-economic conditions, we have been working on cost optimization by taking some healthy measures such as going paperless. At the same time, we also ensured that the morale of our employees remains high. We connected with our on-ground teams regularly through the online medium. Rather, we went one step ahead by making new employees join through e-joining. Q) Have things now started coming back to normal in terms of business? What is your recovery strategy? The lockdown period was definitely difficult for us. However with Unlock 1.0 announced by the government, construction activities have started and we’ve witnessed a good demand from rural areas. The urban demand and the projects continue to remain subdued, which we hope will improve considerably in the coming months. With the easing of the lockdown restrictions, the transport sector is also improving, and we hope that we are able to see a boost in our business in the upcoming months. Going forward, once the government push comes into effect and we see major activities in infrastructure, road projects, housing for the under-privileged (Pradhan Mantri Gramin Awaas Yojana), the consumption is expected to further go up. Seeing the impact of the pandemic, we took some important decisions to make certain changes, both concerning our business and for our employees. It has been a learning experience for us and the journey of learning continues. Now, as the unlock process has started, we have been ensuring that our ground force team is taking all the necessary precautions while going to the market. Q) How did you communicate with your consumers during the lockdown? What were the mediums that you used the most? Today’s customers and clients look for an understanding of what a brand stands for. The only way to accomplish this is with a strategic and consistent representation of the brand in every channel. Having a positive impression in the minds of our target audience and businesses translates directly into stronger brand equity. To begin with, we already had a media mix consisting of, OOH, print media, electronic media, etc. However, with the lockdown, our efforts became more focused on digital media strategies. We have also focused our efforts greatly on rural marketing and identified the strategies that work well with the target audience. We launched the #YehPuccaHai campaign to communicate with our audiences during the lockdown period, keeping our rural audiences also in mind. The message behind the campaign was to showcase how JK Super Cement as a brand always stands for building safe structures with a solid foundation. Additionally, we also wanted to portray the toil of our construction workers who work day and night to ensure that we live in safe homes. With this campaign, we wanted to highlight the social and emotional quotient associated with laborers. Construction workers are the ones who are at the base of any construction cycle and often their work is not given the credit that it deserves. Workers are one of the major pillars of a safe nation and it is only their hardwork that ensures that all of us can live comfortably. This campaign highlights the strength and determination of these construction workers who are devoted to their work. Q) Did you primarily depend on the digital medium, and increase your spends than otherwise? Do you plan to stick to this strategy even after the lockdown? We did rely on the digital medium as our marketing strategy primarily. Brands are keeping digital at the centre of their marketing strategy during the <keyword id="8764728" type="UNKNOWN" weightage="20" keywordseo="covid-19">COVID 19</keyword> era and have opened themselves to a host of platforms, tools, and communication channels. The new normal of marketing would include brands having wider reach across digital mediums and stronger targeting. Today, brands are mastering working on numerous platforms from messaging apps, social media sites, advertisement to search engine tools, influencer marketing and so on. Among marketers, apart from the traditional ATL and OOH <keyword id="852798" type="PERSON" weightage="20" keywordseo="marketing-strategies">marketing strategies</keyword>, digital marketing strategies such as digital promotion, conferences and campaigns are significantly rising. Hence, in the current scenario as well as post Covid-19, digital marketing will emerge as a strong contender amongst marketing strategies. Q) As a leader, what have some of your key learnings been? With the lockdown affecting our business, we made a COVID-19 response playbook ready for our stakeholders talking about our action plan ahead. We provided our employees with adequate PPE kits, sanitisers, monitoring mechanisms etc to ensure their safety. Hence, this lockdown period was a good learning experience for all of us. We were also constantly in touch with our on-ground teams on a weekly/ bi-weekly basis. As a company, we always take the best care of our people first. Employees are the bedrock for any company and this is a virtue that we firmly believe in. We have also launched a campaign for our #SuperDrivers who drive miles to ensure that our raw materials are transported all across the country. Often, their efforts are not recognized in the mainstream discussion, however they are a valuable asset for all of us and contribute greatly to our nation’s development. With the huge success of the #YehPuccaHai campaign, we also learned the importance of leveraging digital medium. Q) What is your vision for the brand? What do you want to stand for in the future as JK Super Cement? JK Super Cement as a brand strives to take care of the people at the bottom of the ladder. The company’s core value of keeping ‘people first’ makes us a promising brand. Our aim is to be the most preferred brand by the consumers for building safe and strong structures for generations to come, which is closely connected to the brand slogan ‘JK Super Cement – Build Safe!’

You Searched For "urban demand slowdown" and got 11 results

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