While growth in investment-linked sectors is expected to continue to decelerate at a fast pace, consumption-led sectors too are experiencing moderation in growth. This is reflected in the slowdown in private final consumption expenditure (PFCE) growth - to 4.6 per cent in Q3 FY13 from 9.2 per cent in Q3 FY12 - resulting in slower growth in sectors such as automobiles, hotels, retail and readymade garments (RMG).

Mukesh Agarwal, President, CRISIL Research, said, "Manufacturing and investment-linked sectors are anticipated to grow at a tepid pace of 4-5 per cent in Q4 FY13. Such sluggish growth was last witnessed over three years ago in Q1 FY10, driven by the dramatic slowdown in the global economy after the credit crisis in the US. But this time, domestic issues such as administrative delays, high cost of capital
and persistent inflation are largely responsible for slowing demand growth."

CRISIL Research's analysis of 28 key sectors (excluding banks, oil and gas companies) indicates that capital goods, construction, commercial vehicles, tyres, auto components and steel are expected to witness either a revenue decline or low single-digit growth in Q4 FY13 on a y-o-y basis, due to the weak demand environment.

Prasad Koparkar, Senior Director, CRISIL Research, said, "Unlike manufacturing, service sectors are expected to witness relatively better revenue growth of 12-13 per cent in Q4 FY13. Corporate India's revenue growth would have been even lower in the absence of support from these sectors. IT services is expected to continue to benefit from rupee depreciation, whereas the media & entertainment sector will see healthy growth driven by increasing digitisation. Telecom services will grow at a steady 6-8 per cent with improving average revenue per user (ARPU)."

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