March IIP data may show 1% fall: Moody's

Industrial recovery may remain elusive with factory production likely to contract again in March by nearly one per cent due to slackening demand and weak export orders, Moody's said.

"I'm expecting a fall of about one per cent year-on-year in March," Moody's Economy.com economist Sherman Chan told PTI.

She further said that external demand, which has slumped in recent months, will at best stabilise by the year-end.

"A strong recovery in outbound shipments is not expected before 2010, meaning export-oriented manufacturers face sluggish business conditions for some time yet," she added.

Index of industrial production (IIP) had contracted for the first time in 15 years in October, and then again in December.

According to the provisional figures, it could be the fourth month in a row and fifth month in the last fiscal that industrial growth may turn negative. However, after revision the provisional figures for October and January, which were negative, have turned positive.

The IIP data for March are scheduled to be released next week.

In February, industrial production contracted by 1.2 per cent as compared to 9.5 per cent recorded a year-ago.