Industrial production in negative zone again, dips 1.9% in February

After feeble signs of a recovery, industrial production once again slipped into negative territory and contracted 1.9 per cent in February due to poor performance in manufacturing, especially capital goods.

Factory output as measured by the index of industrial production (IIP) showed a decline of 0.1 per cent during the 11-month period from April to February, compared with growth of 0.9 per cent in the corresponding period a year earlier. Industrial output for January was revised upward to growth of 0.8 per cent from a provisional estimate of 0.1 per cent, according to data released by the Central Statistics Office (CSO). In February 2013, the IIP recorded modest growth of 0.6 per cent.

Factory output started to decline in October, when the IIP contracted 1.2 per cent, and continued till December, as per CSO data released on Friday. Manufacturing, which constitutes over 75 per cent of the index, declined 3.7 per cent in February as against growth of 2.1 per cent in the same month a year ago. During April-February, the sector's output contracted 0.7 per cent compared with 1 per cent growth previously.
Production of capital goods, a barometer of demand, shrank 17.4 per cent, in sharp contrast to an expansion of 9.1 per cent in the same month in 2012.

The segment declined 2.5 per cent in April-February over a contraction of 7.7 per cent in the comparable period. Overall, 13 of the 22 industry groups in manufacturing showed negative growth in February as compared to the corresponding month of 2012. Output of consumer goods declined 4.5 per cent in February compared with growth of 0.8 per cent a year earlier.

During April-February, consumer goods output contracted 2.8 per cent against growth of 2.5 per cent in the corresponding period of 2012-13. The consumer durables segment contracted 9.3 per cent in February as against a decline of 2.6 per cent previously. For the April-February period, the segment’s output fell 12.2 per cent compared with an expansion of 2.7 per cent earlier.
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