India's factory output declines again in December

India's factory output declined again in December by (-)1.3 percent but was somewhat better than the (-)3.42 percent dip registered in the month before, official data showed on Friday. There was a growth of 3.6 percent in December 2014.

As per data on index of industrial production (IIP) released by the Central Statistics Office, the cumulative growth of the country's factory output logged a 3.1 percent rise in the first nine months of the current fiscal year.

Cumulative growth during the corresponding period of last fiscal stood at 2.6 percent.

December IIP was dragged lower by a (-)2.4 percent drop in manufacturing activity. Between the other broader indices, electricity production rose by 3.2 percent, while that for mining was up by 2.9 percent.

The cumulative growth of the electricity and mining indices for the first nine months of the current fiscal were 4.5 percent and 2.3 percent, respectively. Manufacturing's cumulative growth stood at 3.1 percent.

In addition, the data revealed that among the six use-based classifications of the index, the output of consumer durables segment expanded by 16.5 percent in December. The consumer goods segment accelerated by 2.8 percent.

However, capital goods segment, which is a key indicator of economic activity plunged by (-)19.7 percent. The output of consumer non-durables was lower by (-)3.2 percent.

The basic and intermediate goods' output inched-up by 0.5 percent and 0.9 percent, respectively.

Overall, only 10 out of the 22 industry groups in the manufacturing sector have shown negative growth during the month under review.

Segment-wise, growth was witnessed in 'woollen carpets' (184.1 percent), 'telephone instruments including mobile phone and accessories' (141.1 percent), 'Di Ammonium Phosphate' (46.8 percent), 'wood furniture' (36.9 percent), 'commercial vehicles' (28.7 percent) and 'gems and jewellery' (27.1 percent).

Moreover, high negative growth was reported in the 'cable, rubber insulated' (- 85.2 percent), 'heat exchanger' (- 68.8 percent), 'cement machinery' (- 60.2 percent), 'grinding wheels' (- 37.4 percent), 'boilers' (- 22.7 percent) and 'sponge iron' (- 22.5 percent).