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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Jan 21 2016

Increasing Industrial Sector Risks in India

As the once-celebrated BRICS countries tumble one by one — with Brazil in a depression, Russia in recession, China sending shock waves through world financial markets and South Africa struggling with a crashing rand — India is seen as the last economy standing.
 
But, since India’s exports, which are mostly goods, now account for about a fifth of its GDP, it has become increasingly sensitive to the global economy. As a result, the latest drop in IP growth to a four-year low has caused concern.

The chart displays growth in the three-month trailing average of IP, which has slid to a 13-month low. So is the latest decline in IP growth merely a temporary soft patch or the start of an industrial downturn?
 
In this context, ECRI’s Global Industrial Long and Short Leading Indexes, along with our Asia-Pacific Industrial Growth Long Leading Index, illuminate what lies ahead for IP growth in the last intact BRICS economy.

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