June IIP growth hits five-month high of 7 pc

Industrial output recorded a five-month high growth of 7 per cent in June as production of consumer durables and capital goods picked up pace ahead of festival season, showed government data.

Factory output growth, measured in terms of the Index of Industrial Production (IIP), was revised upwards for May at 3.9 per cent from the previous estimate of 3.2 per cent, according to data released by the Central Statistics Office (CSO) today.

The IIP had shown a marginal decline of 0.3 per cent in June 2017.

As per the data, the first quarter IIP growth stands at 5.2 per cent with manufacturing also recording the same growth. The IIP growth in the year-ago period was 1.9 per cent.

Of the 23 industry groups, 19 recorded positive growth with computer and electronics segment expanding at 44 per cent.

"Excellent numbers of IIP growth for June. IIP rises by 7 per cent. Capital goods growth is 9.6 per cent," said Economic Affairs Secretary Subhash Chandra Garg.

Consumer durable segment recorded an impressive growth of 13.1 per cent in June compared to a decline of 3.5 per cent in the year-ago month.

The 9.6 per cent growth in capital goods segment in June compares with a decline of 6.1 per cent in the same month last year.

The data showed the manufacturing sector, which constitutes 77.63 per cent of the index, grew by 6.9 per cent in June, as against a decline of 0.7 per cent in the year-ago month.

Power generation segment saw a rise of 8.5 per cent during the month as compared to 2.1 per cent growth a year ago.

The mining sector output recorded an impressive growth of 6.6 per cent in June as against 0.1 per cent in June 2017.

Commenting on the data, CCI Director General Chandrajit Banerjee said that industrial output has bounced back sharply and it augurs well for a broad based recovery in industrial performance during the year.

"Even on a low base of last year, this could be the reflection of the positive investment trend, in sectors such as roads, railways and affordable housing," he said.

Anil Khaitan, President of PHDCCI, said growth of capital goods at 9.6 per cent is inspiring as the investment cycle is expected to rebound in the coming months.

The CSO data also showed that 'manufacture of computer, electronic and optical products' has shown the highest positive growth of 44.1 per cent followed by 20.5 per cent in 'manufacture of motor vehicles, trailers and semi-trailers' and 15.6 per cent in 'manufacture of other transport equipment'.

On the other hand, the industry group 'other manufacturing' showed the highest decline of (-) 40.2 per cent followed by (-) 31.7 per cent in 'manufacture of tobacco products' and (-) 0.8 per cent in 'manufacture of textiles'.