IIP in negative zone, dips 1.9% in February

The capital goods sector output also shrank significantly at (-)17.4% versus (-)4.2% in January 2014

After feeble signs of a recovery, industrial production once again slipped into negative territory and contracted 1.9% in February due to poor performance in manufacturing, especially capital goods.

Factory output as measured by the index of industrial production (IIP) showed a decline of 0.1% during the 11-month period from April to February, compared with growth of 0.9% in the corresponding period a year earlier.

Industrial output for January was revised upward to growth of 0.8% from a provisional estimate of 0.1%, according to data released by the Central Statistics Office (CSO). In February 2013, the IIP recorded modest growth of 0.6%.

Factory output started to decline in October, when the IIP contracted 1.2%, and continued till December, as per CSO data released today.

Manufacturing, which constitutes over 75% of the index, declined 3.7% in February as against growth of 2.1% in the same month a year ago.

During April-February, the sector's output contracted 0.7% compared with 1% growth previously.

Production of capital goods, a barometer of demand, shrank 17.4%, in sharp contrast to an expansion of 9.1% in the same month in 2012.

The segment declined 2.5% in April-February over a contraction of 7.7% in the comparable period.

Overall, 13 of the 22 industry groups in manufacturing showed negative growth in February as compared to the corresponding month of 2012.