Industrial output growth declines to 17-month low
NOVEMBER DATA IIP slides to 0.5% on contraction in manufacturing sector
NEW DELHI: Industrial output growth dropped to a 17-month low of 0.5% in November on account of contraction in manufacturing sector, particularly consumer and capital goods.
Factory output as measured in terms of the index of industrial production (IIP) had grown by 8.5% in November 2017, as per data released by the Central Statistics Office (CSO) on Friday.
The previous low was in June 2017, when index of industrial production growth contracted by 0.3%.
The growth for October 2018 was revised upwards to 8.4% from 8.1%.
During the April-november period, industrial output grew 5% as compared with 3.2% in the same period of the previous fiscal.
The manufacturing sector, which constitutes 77.63% of the index, recorded a contraction of 0.4% in November as against a growth of 10.4% a year ago.
The mining sector posted 2.7% growth during the month as against 1.4% in November 2017.
Power sector output also grew by 5.1% from 3.9% a year ago period.
Capital goods output declined by 3.4%, compared with 3.7% growth a year ago.
Consumer durables output also dipped by 0.9% as against a growth of 3.1% a year earlier.
Consumer non-durable goods also saw a contraction of 0.6% as compared with 23.7% growth a year ago.
In terms of industries, 10 out of 23 industry groups in the manufacturing sector showed positive growth during November 2018.
As per use-based classification, the growth rates in November 2018 over November 2017 are 3.2% in primary goods, (-) 4.5% in intermediate goods and 5 per cent in infrastructure/construction goods.
This may be a challenge to sustain as the government is likely to cut back on capital expenditure to meet the fiscal targets which stand at 112% of its full-year target in the first eight months till November.