India’s economy held steady in July as waning Covid-19 cases paved the way for a gradual improvement in manufacturing and services activity. All eight high-frequency indicators tracked by Bloomberg News remained unchanged last month, supported the three-month weighted average scores to smoothen out volatility within the single-month readings. That kept the needle on a dial measuring the so-called animal spirits steady at 5 — an equivalent speed as June.

Relaxation in restrictions and a lower-than-expected hit to the economy from the second wave of the pandemic is fueling hopes of a faster recovery in coming months, with even tourism — one among the worst affected sectors — seeing a rebound. Data due August 31 will likely show gross domestic product expanded 21 per cent within the April to June quarter from a year ago. that’s thanks mainly to a positive base effect, with activity last year coming to a halt due to a nationwide lockdown to regulate the virus’s spread.

Here are the small print of the dashboard for July:

Business Activity

Factory managers in India saw a surge in activity in July, reflecting a devour in orders as pandemic curbs were lifted. an identical survey of services’ purchasing managers showed improvement, although the reading remained below the 50 level that divides contraction and expansion. That kept the composite index in shrinkage territory during the month.

Exports

Exports rose 49.8 per cent year-on-year in July. While that was way slower than the 196 per cent increase seen in April, the ebbing gains largely reflect the bottom effect wearing off. Two positive takeaways are the return of demand for petroleum products, with shipments jumping 231 per cent, and gems and jewellery exports growing 131 per cent.

Consumer Activity

Retail auto sales, a bellwether of consumer demand, posted robust sales despite a steep rise in commodity prices and provide disruptions, consistent with Rajesh Menon, director general of the Society of Indian Automobile Manufacturers. Motorcycle and two-wheeler sales, an indicator of animal spirits in smaller towns, were little changed last month.

Bank credit grew 6.5 per cent in July from a year earlier, learning from the 5.8 per cent level seen in June, to post the fastest pace since March, financial institution data showed. Liquidity conditions remained comfortable last month, with the banking industry flush with surplus cash, implying room for better credit off-take.

Industrial Activity

Industrial production expanded 13.6 per cent in June from a year earlier, slowing for a second straight month after a record 135 per cent growth in April. Easing gains are again due to the bottom effect wearing out.

Similarly, output at infrastructure industries, which makes up 40 per cent of the economic production index, expanded 8.9 per cent in June, slowing from year-on-year growth of 16.3 per cent in May and 61 per cent in April. Both data are published with a one-month lag.