Page 33 - economic_survey_2021-2022

State of the Economy 7

1.6 Since January 2021, the widely used Purchasing Managers’ Index-Manufacturing has
remained in the expansionary zone (i.e. over 50) except for one month when the second wave
had slowed down economic activity (Figure 8). The Index of Industrial Production (IIP) and
Core Industry indices have both followed a similar pattern and, in November 2021, went past
their pre-pandemic level for the corresponding month in 2019 (Figure 7).

Figure 7: Industrial Output Figure 8: PMI Manufacturing

8-Core Industries IIP General Index 65
170
1st Lockdown
150 55 Lockdown
130 1st
Index 110 Index 45

90 2nd Wave 35 2nd Wave
70

50 25
Feb/19 May/19 Aug/19 Nov/19 Feb/20 May/20 Aug/20 Nov/20 Feb/21 May/21 Aug/21 Nov/21 Jan/19 Jun/19 Nov/19 Apr/20 Sep/20 Feb/21 Jul/21 Dec/21

Source: MoSPI, DPIIT Source: IHS Markit

1.7 Rising capital expenditure by the government on infrastructure and an uptick in the
housing cycle have been responsible for reviving the construction sector. This has allowed the
consumption and production of steel and cement consumption to revert to pre-COVID levels
(Figure 9). Statistics provided by RBI and leading real estate companies’ show significant
revival in the Indian residential real market in 2021 in terms of growth in sales, prices and new
launches (Figure 10 and 11).

Figure 9: Construction Sector Indicators

Cement Production Steel Consumption
140
120
Index (Feb 2020 = 100) 80
100

60

40
20
0
Feb/20 Apr/20 Jun/20 Aug/20 Oct/20 Dec/20 Feb/21 Apr/21 Jun/21 Aug/21 Oct/21 Dec/21

Source: Joint Plant Committee; and O/o Economic Advisor, DPIIT