Consumer confidence perks up in Q2: Assocham2 min read . Updated: 11 Sep 2021, 01:25 PM IST
- Rapid pace of vaccination and drop in covid-19 infections have led to an uptick in economic activity, Assocham said in its assessment
New Delhi: Consumer confidence is improving ahead of the key festival season when Indian households increase their purchases.
Industry body Assocham said that feedback from its member companies, including small and medium enterprises, points to improved consumer confidence in several key sectors of the economy. This is true for contact services like hospitality while activities in construction and renovation have been on a pick-up for the past few months leading to return of migrant workers for gainful deployment.
Assocham has over 400 chambers and trade associations and services the need of over 4.5 lakh members across India.
Rapid pace of vaccination and drop in covid-19 infections have led to an uptick in economic activity, Assocham said in its assessment from member companies.
"Our feedback from our member companies, including those in the SMEs points towards steady pick-up in economic activities with notable gains visible in retail trading, malls, food business and inter-state travel. With most of the states allowing entry of fully vaccinated people without RTPCR tests for Covid-19, the tourist activities have picked up in states like Himachal Pradesh, Uttarakhand, Rajasthan and Goa," Assocham said in its assessment note.
It expects the Indian economy to grow in double-digit by the end of the current financial year, albeit on a low base.
The bounce back, as witnessed during the first quarter of the current fiscal, should consolidate into a sustainable trend, going forward, it said.
Assocham’s secretary-general Deepak Sood said consumer demand is visible and turning into business volumes. "This would be reflected in the second quarter results of corporate India. We should see definite improvement in industries like paints, consumer durables, passenger vehicles and engineering goods," he said.
Domestic demand aside, Assocham said feedback from exporters also showed a “positive outlook" for the current financial year.
While demand is gradually improving, increased global freight costs are still a concern.
"Exports to Europe, the US and several Asian destinations would definitely look up. Prospects for exports of metal and other engineering goods, textiles, chemicals and agri products appear bright. While there is a good demand in the developed nations, the issue of concern relates to increasing cost of cargo movement by ship liners. Hopefully, this should play out as the supply bottlenecks are eased," it said.
Meanwhile, as the country enters the festive season, coordinated efforts from states to control the spread of the virus, speedier vaccination drive and ensuring covid appropriate behaviour will be key.
"While the governments, trade and industry are in a far better position to manage and live with the health challenges, further decline in the number of cases would add to the business confidence.
Assocham has been reaching out to its members for maintaining a constant vigil on their workplace with regard to covid appropriate behaviour, Sood said.
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