Factory output growth slows to five-month low of 2.1%

Industrial production grew at a five-month low of 2.1 <g data-gr-id="45">per cent</g> in March even as both manufacturing activity and capital goods’ offtake improved during the month. The factory output, as measured by the Index of Industrial Production (IIP), had contracted by 0.5 per cent in March 2014.

For 2014-15 fiscal, industrial production grew at 2.8 per cent as against contraction of 0.1 per cent in 2013-14, the data released by the Central Statistics Office on Tuesday showed. Meanwhile, the IIP for February has been revised downwards to 4.86 per cent per cent from the provisional estimate of 5 per cent released last month. The IIP had grown at 2.77 per cent in January, 3.56 <g data-gr-id="46">per cent</g> in December and 5.2 <g data-gr-id="47">per cent</g> in November. The factory output contracted by 2.7 per cent in October.

Manufacturing output, which constitutes over 75 per cent of the index, grew by 2.2 per cent in March against a contraction of 1.3 <g data-gr-id="49">per cent</g> in the same month a year ago. The production of capital goods, a barometer of demand, grew by 7.6 per cent in March as against a contraction of 11.5 per cent in <g data-gr-id="44">same</g> month of last year. 

<g data-gr-id="63">Mining</g> sector grew by 0.9 per cent in March 2015 against 0.5 per cent expansion in the same month last year. Overall, 13 out of 22 industry groups in the manufacturing sector showed positive growth during the month of March. For whole 2014-15, the manufacturing sector expanded by 2.3 per cent, against a contraction of 0.8 per cent in 2013-14. Capital goods output grew by 6.2 <g data-gr-id="64">per cent</g> in last fiscal as against a dip of 3.6 per cent in 2013-14. Mining output rose by 1.4 per cent last fiscal against a contraction of 0.6 per cent in 2013-14. Power generation grew by 2 per cent in March against 5.4 per cent in the same month last year. During 2014-15, power generation grew at 8.4 <g data-gr-id="65">per cent</g> compared to a growth of 6.1 per cent in previous fiscal. The overall consumer goods output contracted 0.7 <g data-gr-id="66">per cent</g> in March compared to a dip of 2.2 <g data-gr-id="67">per cent</g> in the same month last year. The output was also contracted by 3.5 per in the entire 2014-15 fiscal compared to a decline in production by 2.8 <g data-gr-id="40">per cent</g> in the same month last year.

The consumer non-durable production grew by 1.9 per cent in March compared to a growth of 5 per cent in <g data-gr-id="41">same</g> month last year. During 2014-15, the segment grew by 2.8 <g data-gr-id="39">per cent</g> compared to a growth of 4.8 per cent in previous fiscal. Consumer durable goods output declined by 4.7 per cent in March compared to a contraction of 11.8 per cent in <g data-gr-id="50">same</g> month a year ago. During 2014-15, the segment’s output dipped by 12.5 per cent compared to a contraction of 12.3 per cent in previous fiscal.

<g data-gr-id="60">However</g> the basic goods grew by 2.3 per cent in March compared to 4.6 <g data-gr-id="55">per cent</g> growth in <g data-gr-id="59">same</g> month last year. During <g data-gr-id="58">2014-15</g> the output grew by 6.9 per cent compared to 2.1 per cent in previous fiscal. The production of intermediate goods grew by 1.9 per cent in March compared to a growth of 1.3 per cent in <g data-gr-id="57">same</g> month a year ago. During 2014-15, the output of these goods grew by 1.6 per cent compared to a growth of 3.1 per cent in 2013-14.