June IIP growth slows to 3.4%

Consumer durable goods, manufacturing disappoint while electricity, mining report growth

Showing signs of sluggishness in the economy, growth rate of industrial production slowed to 3.4% in June, as against 5% in May, mainly due to lower output of consumer goods.

However, the factory output number has remained in the positive territory for the third month in a row mainly due to a better show by manufacturing, mining and power sectors and higher output of capital goods.

The output, as measured by the Index of Industrial Production, had contracted by 1.8% in June, 2013.

IIP for May was revised to 5% from the provisional estimates of 4.7% released last month, according to data released by the Central Statistics Office (CSO).

During the April-June period of the current fiscal, IIP has recorded a growth of 3.9%, as against contraction of 1% in the first quarter of 2013-14.

According to the IIP data, output of consumer goods contracted by 10% in June compared to the contraction of 1.5% a year ago. For the April-June quarter, the segment shows a contraction of 3.6%, compared to a decline of 2.1% in the same period of 2013-14.

The consumer durables segment declined by 23.4% in June, as against a dip of 10.1% a year ago. For April- June, it declined by 9.6% as against a dip of 12.7% in the first quarter of last fiscal.

Similarly, the consumer non-durable goods output grew at a meagre rate of 0.1% in June compared to 6.2% in same month last year. During April-June, the segment grew at 0.7% compared to 7.1% in same period last fiscal.

Manufacturing, which constitutes over 75% of the index, grew 1.8% in June, compared to decline in output by 1.7% a year ago. For April-June, the sector grew at 3.1% growth, compared to the contraction of 1.1% in the year-ago period.

Overall, 15 of the 22 industry groups in manufacturing showed positive growth in May.