India's industrial output lowers in June

Marco Green
August 12, 2017

IIP grew by 3.4 per cent in April and 2.8 per cent May, according to the revised estimates released today.

Primary goods production in June 2017 declined by 0.2 per cent and capital goods production by 6.8 per cent while production of intermediate goods was lower by 0.6 per cent and output in the infrastructure/construction goods sector increased by 0.6 per cent. The output had seen a 2.8% rise seen in the month of May.

The Data further reveals that the factory output grew at a slow pace of 2 per cent in the first quarter of the present fiscal.

On a quarterly basis, factory output growth during April-June slowed down to 2 per cent from 7.1 per cent in the corresponding period a year ago. "As expected, inventory paring prior to the GST resulted in a mild contraction in manufacturing output of 0.4% in June", said Aditi Nayar, principal economist at ICRA Ltd.

The output of mining and electricity sectors during the month decelerated to 0.4% and 2.1% from 10.2% and 9.8% respectively in June previous year.

The consumer durables and consumer non-durables have recorded growth of (-) 2.1% and 4.9% respectively. "Within the IIP, metals and automobiles are the only non-consumer segments that have grown".

The outlook, however, seems more optimistic with a favourable monsoon and the Seventh Pay Commission payout projected to bolster consumer demand.

Data released by the Central Statistics Office (CSO) on Friday showed the index of industrial production (IIP) fell 0.1% in June compared to an expansion of 8% in the previous year-ago period and lower than the 2.8% growth in May.

"Since GST has already kicked in, the restocking of inventories will take place that is likely to boost industrial output", Care Ratings wrote in a note.

Other reports by Click Lancashire

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