Millennium Post

Manufacturing slump pulls August industrial growth down to 0.6 per cent

After recording modest growth in the previous month, industrial output again slowed down sharply to 0.6 per cent in August mainly on account of a contraction in manufacturing and mining.

Factory output, which showed some signs of recovery after recording a growth of 2.8 per cent in July, remained almost flat year-on-year because of a slump in production of consumer goods and durables.

The output, measured on the Index of Industrial Production (IIP), was 2 per cent in August last year.

As per the data released by the government on  Friday, IIP for April-August worked out to be 0.1 per cent compared with 0.2 per cent in the same period of 2012-13 financial year.

The IIP figure for July has been revised upward at 2.8 per cent from 2.6 per cent, it said. It had contracted by 1.8 per cent in June.

The manufacturing sector, which constitutes over 75 per cent of the index, contracted by 0.1 per cent in August as against an expansion of 2.4 per cent in the year-ago period.

During April-August, the sector saw a decline of 0.1 per cent compared with a flat growth in the same period last year.

The mining sector, with a weight of about 14 per cent in the IIP, showed a contraction of 0.2 per cent in August as against a decline of 0.3 per cent in the same month last fiscal. However, power generation showed a healthy growth of 7.2 per cent in the month under review. The growth works out at 4.5 per cent in April-August period.

As per the data, output of capital goods, a barometer of demand, showed a decline of 2 per cent as against a contraction of 4.4 per cent in August 2012. However, on cumulative basis, the segment showed an expansion of 0.8 per cent in April-August as against a sharp contraction of 14.4 per cent.

The data further revealed that consumer durables segment contracted by 7.6 per cent in August, while the decline in consumer goods segment was 0.8 per cent.

The growth in consumer non-durables sector was 5 per cent as against 6 per cent in the year-ago period. During April- August, the growth cumulates to 6.6 per cent.w Intermediate goods segment expanded at a rate of 3.6 per cent and basic good at a rate of 1.5 per cent in August.

Giving further details, the data showed there was contraction in host of segments, including food products and beverages, wood and its products, basic metals, fabricated metal products and machinery and equipment.

There were expectations that the industrial production would be better in the backdrop of the eight infrastructure industries posting a 7-month high growth rate of 3.7 per cent in August.
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