Industrial output growth slows down to 0.5% in July

Decline in manufacturing output and lower offtake of consumer durables pulled down industrial production growth to 4-month low of 0.5 per cent in July, dashing hopes of recovery.

The factory output, as measured by the Index of Industrial Production, had grown by 2.6 per cent in July, 2013.

IIP for June has been revised upwards to 3.9 per cent from the provisional estimates of 3.4 per cent released last month, according to data released by the Central Statistics Office.

During the April-July period of the 2014-15 fiscal, IIP has recorded 3.3 per cent growth, as against contraction of 0.1 per cent in the same period of 2013-14.

According to the IIP data, manufacturing -- which constitutes over 75 per cent of the index, contracted 1 per cent in July, compared to 3 per cent growth in output a year ago. For April-July, the sector has grown at 2.3 per cent, compared to 0.1 per cent contraction in the year-ago period.

The consumer goods output contracted by 7.4 per cent in July compared, to 0.7 per cent contraction logged a year ago. For April-July, the segment shows a contraction of 4.5 per cent, compared to a decline of 1.8 per cent in the same period of 2013-14.

The consumer durables segment declined by 20.9 per cent in July, as against a dip of 9.6 per cent a year ago. For April-July, it declined 12.5 per cent as against a dip of 11.9

per cent in the four month period of last fiscal.

Consumer non-durable goods output grew at 2.9 per cent in July, compared to 7.4 per cent in same month last year. During April-July, the segment has grown at 1.3 per cent compared to 7.2 per cent in same period last fiscal.

According to the CSO data, production of capital goods, a barometer of demand, contracted by 3.8 per cent in July, in sharp contrast to a growth of 15.9 per cent in same month of last year.

For the April-July period, the capital goods output has grown by 8.5 per cent, compared to 1.4 per cent in the first four months period of 2013-14.

The mining sector grew by 2.1 per cent in July as against a dip of 3 per a year ago. For April-July, the segment grew by 2.8 per cent, compared to decline in production by 4.3 per cent in the year-ago period.

Power generation increased by 11.7 per cent in July as compared to 5.2 per cent growth a year ago. In April-July, power output grew by 11.4 per cent compared to a growth of 3.9 per cent in the same period a year-ago.

Output of intermediate goods expanded 2.6 per cent in July, compared to 3.2 per cent a year ago. For April-July the output has grown by 2.8 per cent, compared to 2.1 per cent growth in the first four months of last fiscal.

Basic goods output grew 7.6 per cent in July, against a growth of 1 per cent a year ago. For April-July, the segment has grown by 8.1 per cent compared to 0.1 per cent in the same period of 2013-14.