IIP growth remains subdued at 0.4% in August 2014

IIP growth for May 2014 revised upwards to 5.6% from 4.7% reported originally

India's Index of industrial production (IIP) growth remained subdued at 0.4% in August 2014 compared with 0.4% (revised) increase in July 2014. The manufacturing sector's output declined for second straight month at 1.4%, mainly contributing to the subdued IIP growth in August 2014. However, mining sector output increased 2.6%, while electricity generation posted a double-digit growth for the third straight month, at 12.9%, in August 2014.

As per the used-based classification, output of basic goods surged 9.6% in August 2014, with the healthy growth in electricity generation and mining output. Output of intermediate goods rose 0.3%. However, capital goods output declined 11.3% in August 2014, in addition to 2% fall recorded in August 2013. Output of consumer goods also declined 6.9% in August 2014, as production of consumer durable dipped 15% in August 2014 and those of consumer non-durable also fell 0.9% growth in August 2014.

The IIP growth for May 2014 was revised upwards to 5.6% at its second and final revision compared with 5% at its first revision and 4.7% released originally. Meanwhile, the growth for July 2014 was scaled down slightly to 0.4% at its first revision compared with 0.5% reported provisionally.

In terms of industries, eleven (11) out of the twenty-two (22) industry groups in the manufacturing sector showed positive growth in August 2014, compared with the corresponding month of the previous year.

The industry group 'Basic metals' has shown the highest positive growth of 19.1%, followed by 14.3% in 'Other transport equipment' and 10.9% in 'Luggage, handbags, saddlery, harness & footwear; tanning and dressing of leather products'.

On the other hand, the industry group 'Radio, TV and communication equipment & apparatus' has shown the highest negative growth of (-) 48.8%, followed by (-) 43.9% in 'Office, accounting & computing machinery' and (-) 17.8% in 'Electricity machinery & apparatus'.

Some of the important items showing high positive growth during the current month over the same month in previous year include 'Stainless/ alloy steel' (160.8%), 'Sealed compressors' (121.1%), 'Air Conditioner (Room)' (80.1%), 'Plastic Machinery Incl. Moulding Machinery' (59.4%), 'Rice' (56.7%), 'Scooter and Mopeds' (32.1%), 'Three-Wheelers (including passenger & goods carrier)' (31.3%) and 'Fasteners (Excl. Zip-Fasteners)' (25.1%).

Some of the other important items showing high negative growth are: 'Telephone Instruments (incl. Mobile Phones & Accessories)' (-) 57.2%, 'Generator/ Alternator' (-) 51.3%, 'Computers' (-) 49.5%, 'Marble Tiles/ Slabs' (-) 44.0%, 'Polythene Bags Incl. HDPE & LDPE Bags' (-) 42.3%, 'Aluminium Conductor' (-) 37.2%, 'Sugar Machinery' (-) 33.6%, 'Boilers' (-) 32.0%, 'Sugar' (-) 30.8%, 'Antibiotics & Its Preparations' (-) 23.8%, 'Cable, Rubber Insulated' (-) 23.7%, 'Steel Structures' (-) 22.6% and 'Fuel, Aviation Turbine' (-) 21.8%.

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