Page 32 - ie2 August 2019

OVERSIGHT

billion in June 2018. Oil imports in SUMMARY ON GLOBAL TRENDS
June 2019 were $11.03 billion which
was 13.33 percent lower compared to After showing somewhat optimistic perfor- relating to global trade tensions and Brexit.
$12.73 billion in June 2018. Oil imports mance in the first quarter (Q1) of 2019, global The Japanese economy accelerated in Q1 on
in April-June 2019-20 were $34.85 bil- economic activity has been losing pace as net exports gains and increased public invest-
lion which was 0.62 percent higher in apprehended, reflecting further slowdown in ment. In April, industrial production improved,
trade and manufacturing activities. Among the
dollar terms compared to $34.64 billion developed economies, US saw its best first while retail sales fell.
Economic activity has slowed in many emerg-
over the same period last year. Non-oil quarter in the last four years with 3.2 percent ing market economies during Q1 of 2019.
imports in June 2019 were estimated growth supported by higher government The Chinese economy grew at the same pace
at $29.26 billion which was 7.34 per- spending, increase in private investment, and as in the previous quarter, but that was slightly
cent lower in dollar terms compared to lower imports. However, factory activity and better than expectations. However, data on
$31.58 billion in June 2018. Non-oil im- retail sales moderated in April. The recent drop industrial production and retail sales suggest
ports in April-June 2019-20 were $92.19 in import volumes may cause a disruption in that the growth momentum may weaken in Q2.
billion which was 0.62 percent lower in global value chains and lead to weaker export The Russian economy, which had shown some
dollar terms compared to $92.77 billion and investment growth in the coming quarters. signs of recovery in Q4:2018, weakened in Q1
in April-June 2018-19. Economic activity in the Euro area has on muted domestic activity and trade.
Economic activity in South Africa contracted in
Trade deficit in June 2019 narrowed remained weak with 1.5 percent y-o-y growth Q1 led mainly by a sharp decline in manufac-
down by 8 percent to $15.28 billion in Q1 due to muted industrial activity and weak turing activity.
business confidence. Leading indicators point
from $16.6 billion in June 2018. On a to a further slowdown in the Euro area in Q2. Brazil’s economy contracted in Q1 for the first
cumulative basis, trade deficit mounted In the UK, GDP growth for Q1 picked up on time since 2016 and there are fears that it could
by 2.3 percent to $45.96 billion in April- high retail sales and government expenditure. return to recession.
June 2019-20 from $44.94 billion dur- However, the outlook is clouded by uncertainty Source: RBI
ing the same period last fiscal.

ENGINEERING EXPORTS

FTER witnessing y-o-y growth in Table1: Engineering exports ($ million)
May 2019, Indian engineering ex-
Aports declined by 2.31 percent in Month 2018-19 2019-20 Growth (%)
June 2019 over the same month last fiscal.
It registered 4.54 percent growth in May April 7020.54 6477.51 -7.73
after a 7.7 percent y-o-y decline in April May 6928.08 7242.49 4.54
2019. Engineering exports were at $6.36
billion in June 2019 as against $6.51 bil- June 6512.31 6361.98 -2.31
lion in the same month last fiscal.
Cumulative engineering exports dur- April-June 20460.93 20081.98 -1.85
ing the first quarter (April-June) of 2019- Source: DGCI&S, Govt of India
20 also witnessed 1.85 percent decline
over the same period last fiscal. It was
$20.08 billion during the first quarter of 2019-20 vis-à-vis 2018-19 are depicted in component of the broader manufactur-
2019-20 as against $20.46 billion during Table1 as per the latest quick estimates. ing sector and the share of engineering
the same period last fiscal. Share of en- Figure1 depicts the monthly trend in en- production in overall manufacturing
gineering exports in total merchandise gineering exports during fiscal 2019-20 output is quite significant. As exports
exports was somewhat higher at 25.4 vis-à-vis fiscal 2018-19. happen over and above production gen-
percent during June 2019 as compared to erally, some correlation between manu-
24.2 percent during May 2019. On a cu- Correlation between facturing production growth and engi-
mulative basis, it was 24.8 percent during manufacturing production and neering export growth should exist. We
April-June 2019-20. engineering exports briefly look at the trend in manufacturing
The monthly engineering figures for The engineering sector is an important growth as also engineering export growth

32 l INDIAN ENGINEERING EXPORTS l AUGUST 2019