Industrial output slips into negative territory with a contraction of 1.9 per cent in October

Industrial output slipped into the negative territory again with a contraction of 1.9 per cent in October mainly due to sharp decline in production of capital goods and poor performance of manufacturing sector.

After showing decline for two consecutive months of July (-2.5 per cent) and August (-0.7 per cent), factory output, as measured in terms of the Index of Industrial Production (IIP), had grown at 0.7 per cent in September.

For the April-October period, industrial output declined by 0.3 per cent as against a growth of 4.8 per cent a year ago, as per the data released by Central Statistics Office (CSO) today.

Factory output grew at a higher rate of 9.9 per cent in October last year mainly driven by better performance of manufacturing sector and increase in output of capital goods by 16.5 per cent.

The manufacturing sector, which constitutes over 75 per cent of the IIP index, recorded a contraction 2.4 per cent in October. Similarly the capital goods output also shrank by 25.9 per cent.

In terms of industries, 12 out of 22 groups in the manufacturing sector showed negative growth in October. The mining sector recorded a contraction of 3.1 per cent in October as against a growth of 3.5 per cent a year ago.

Power generation recorded a growth of 1.1 per cent in October compared to 5.3 per cent growth in the same month a year ago. Growth in output of consumer durables went up by just 0.2 per cent in October compared to 41.9 per cent growth a year ago.

The output of consumer non-durable goods declined by 3 per cent in October as against 4.8 per cent growth a year ago. Overall, consumer goods production dipped 1.6 per cent in October compared to 18.3 per cent growth a year ago.

As per ‘use-based’ classification, the growth rates in October 2016 over October 2015 are 4.1 per cent in basic goods, (-) 25.9 per cent in capital goods and 2.9 per cent in intermediate goods.