After contracting for two straight months, industrial production entered the positive zone, recording a growth of 2.6 per cent on account of improved performance of manufacturing and power sectors.

Factory output measured in terms of the Index of Industrial Production had contracted 0.1 per cent in July last year, as per the data released by Central Statistical Organisation on Thursday.

Meanwhile, IIP for June was revised upwards to a decline of 1.78 per cent from a provisional 2.2 per cent dip in production. It contracted by 2.8 per cent in May this year.

During April-July this year, factory output contraction remained flat at 0.2 per cent.

The manufacturing sector, which constitutes over 75 per cent of the index, grew by 3 per cent in July compared to zero growth in

the month a year earlier. During April-July, the sector saw a decline of 0.2 per cent compared with a contraction of 0.6 per cent in the period last year.

Power generation increased by 5.2 per cent in July as against a growth of 2.8 per cent in same month in 2012.

Power generation in the April-July grew 3.9 per cent compared with an expansion of 5.5 per cent in same period last year.

Output of capital goods, a barometer of demand, grew by 15.6 per cent in July compared with a decline of 5.8 per cent in the same month a year earlier.

During April-July, capital goods production grew 1.8 per cent compared with a production drop of 16.8 per cent in same period last year.

In April-July, the sector declined 4 per cent compared with a contraction of 2 per cent in the corresponding period.

Among the 22 industry groups in the manufacturing sector, 11 recorded positive growth in July.