Industrial output grew 2.6% in July after declining for two months

Industrial output grew by 2.6 per cent in July compared with the same month last year, led by double-digit growth in capital goods sector as per quick government estimates. The growth rate also beat analyst expectations, raising hopes of a revival in the industry.

The growth in index of industrial production (IIP) in July follows two straight months of decline. Cumulatively, for the first four months of the year, IIP was still lower at (-) 0.2 per cent due to decline in production in May and June, according to data compiled by Central Statistics Office of the Ministry of Statistics and Programme Implementation.

IIP declined 1.8 per cent in June after dropping 2.8 per cent in May. In April, it grew 1.5 per cent.

While mining activity continued to slide, declining 2.3 per cent in July over the year-ago period, the index for manufacturing and electricity sectors grew 3 per cent and 5.2 per cent, respectively. The cumulative growth in the three sectors during April-July 2013-14 over the corresponding period of 2012-13 has been (-) 4 per cent, (-) 0.2 per cent and 3.9 per cent, respectively.

In terms of industries, 11 out of the 22 industry groups in the manufacturing sector have shown positive growth during July. Within this, electrical machinery and apparatus grew 83.6 per cent, followed by a 44 per cent growth in apparel, dressing and dyeing of fur and a 16.5 growth clocked by luggage, handbags, saddlery, harness & footwear, tanning and dressing of leather products as a broad sector.

As per use-based classification, capital goods sported a strong 15.6 per cent growth in July followed by 2.4 per cent growth of intermediate products and 1.7 per cent growth in basic goods. Consumer durables declined 9.3 per cent but consumer non-durables grew 6.8 per cent with the overall consumer goods industry declining by 0.9 per cent.

Some sub industries showing high growth include fruit pulp (50.5 per cent), cashew kernels (23.2 per cent), apparels (39.8 per cent), leather garments (62.6 per cent), vitamins (61.8 per cent) and ayurvedic medicaments (44.6 per cent).

On the flip side, sub sectors which clocked a decline in activity include grinding wheels, boilers, room air conditioner, earth moving machinery, sugar machinery, telephone instruments (including mobile phones & accessories) and gems and jewellery.

(Edited by Joby Puthuparampil Johnson)

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