Jan. industrial growth slows to 3.8%

Eight of the 23 manufacturing segments tracked by the NSO to compute the IIP contracted in January; manufacturing growth slowed to 3.2%, from 4.5% in Dec. and consumer nondurables contracted for the second time in three months

ndia’s industrial output growth slowed to 3.8% in January, from an upgraded uptick of 4.24% in December, with the manufacturing sector’s growth slowing to 3.2%, from 4.5% a month earlier, and consumer nondurables slipping into contraction for the second time in three months.

Mining and electricity generation accelerated to 5.9% and 5.6%, respectively. Consumer durables production jumped 10.9%, the highest growth in three

Imonths, but gained from base effects as their output had contracted 8.2% in January 2023. Consumer nondurables output shrank 0.3%.

Capital goods production picked up pace to grow 4.1% in January, and intermediate goods also grew faster at 4.8% compared with 3.9% in December 2023. However, the growth rates for primary goods and infrastructure/ construction goods eased to 2.9% and 4.6%, respectively, in January.

Eight of the 23 manufacturing segments tracked by the National Statistical Office to compute the Index of Industrial Production (IIP) recorded a contraction in January, with computers, electronics and optic products seeing the steepest fall of 11.9%, while pharmaceuticals’ output remained flat compared with last January.

Between April 2023 and January 2024, electronics and computers have now contracted 14%, second only to the 17.5% drop in output of wearing apparel over the same period.

On the other hand, other transport equipment grew 25.3%, fabricated metal products rose 21.4%, followed by motor vehicles.

Bank of Baroda’s chief economist Madan Sabnavis said electronics’ performance remained a disappointment as it was also covered under the ProductionLinked Incentive or PLI scheme. “Clearly, it has not yet provided momentum to production so far,” he observed.