Industrial output rises 0.7% in September

However, capital goods decline for 11th straight month; growth in consumer non-durables almost stagnant

Industrial production in the country expanded by 0.7% in September. However, important segments like capital goods continued to go down while consumer non-durables rose marginally by 0.1%.

In the previous month of August, the Index of Industrial Production (IIP) that measures growth in industrial output, fell by 0.67%. Industrial production in the first half of current fiscal contracted by 0.1%, as against 4% growth in year ago period.

The sector of capital goods, saw production fall for eleventh month in a row. It continued to contract by 21.6% in September, after a fall of 22.3% in August, thereby confirming bleak investment outlook. This contraction has consistently acted as the big drag on the performance of the IIP Index.

So far, in 2015-16, capital goods output has contracted by 21.4% compared to growth of 7.8% in the same period of previous year.

Growth in manufacturing, which constitutes roughly three-fourths of the index, rose by 0.9%, government data showed on Friday. It had contracted by 0.16% in August. However, it has cumulatively fallen by 0.8% in the current financial year. In the corresponding period of the last year, it had grown by 4.2%.

Electricity generation rose at 2.4% against a marginal rise of 0.1% in the previous month of August. On the other hand, mining output went down by a slower pace of 3.1% as compared to the 5.8% fall in the previous month.

In September, 12 out of the 22 industry groups within manufacturing showed growth, down from 15 in August.

Growth rates among product categories mellowed in September with other transport equipments managing the highest pace of growth at 12.8%, followed by machinery and equipment, which rose by 10.5%.

Electrical machinery & apparatus on the other hand, continued to fall by the largest margin at more than 49%.

Cable continued to contribute the most to the contraction in the index. Commercial vehicles came in next. On the other hand, H R Coils and passenger cars were the highest positive contributors to growth.

The combined output of eight core infrastructure sectors, which carry a total weight of nearly 38% in the IIP index, had risen by 5% in September mainly due to sustained growth in the steel sector and an increase in refinery production. This had been expected to give a push to the IIP.

On the demand side, the consumer durables sector maintained its uptrend at 14%. In 2015-16, consumer durables grew 7.6%. Consumer non durables, on the other hand managed to rise by a marginal 0.1%.