Millennium Post

Factory output dives south, spoils cooling inflation party

In a fresh setback, industrial production saw the sharpest contraction in three years of 4.2 per cent in October, though cheaper food items helped retail inflation to ease further to 4.3 per cent in November. It stood at 5.52 per cent in October 2014, while the same was over double the current level at 11.16 per cent in November 2013.

Factory output as measured by Index of Industrial Production (IIP) declined due to contraction in manufacturing, capital goods and consumer items. The factory output for the month under review was the lowest since October, 2011 when it had recorded a contraction of 4.74 per cent.

IIP had declined by 1.2 per cent in October last year. For September, it was revised to 2.8 per cent from the provisional estimates of 2.5 per cent released last month, according to the official data. For the April-October period, IIP is up 1.9 per cent, as against 0.2 per cent in same period of last fiscal.
Manufacturing output, which constitutes over 75 per cent of the index, contracted by 7.6 per cent in Oct, compared to a dip of 1.3 per cent in same month last. For Apr- Oct, the sector saw an output growth of 0.7 per cent, compared to a contraction 0.1 per cent in the year-ago period.

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