Industrial growth slumps in July on power, mining

Industrial growth in July slowed down to 6.7 per cent compared with 8.5 per cent last year. The slowdown was mainly owing to a decline in the mining and electricity sectors.

During April-July 2005, the industrial sector grew 9.3 per cent, compared with 7.9 per cent during the corresponding period last year, according to data released by the Central Statistical Organisation yesterday.

However, according to D K Joshi, senior economist with Crisil, the index had captured the Mumbai floods impact on industrial production and "is not indicative of a slowdown in industrial activity". He said there should be a reversal of the trend in the coming months, particularly in the manufacturing and electricity sectors.

The spiralling oil prices, however, were likely to cause a decline in industrial production in the long-term, Joshi added. During July, manufacturing sector growth slowed marginally to 8.3 per cent from last year's 8.4 per cent.

On the other hand, output in the mining and electricity sectors declined 0.4 per cent and 1.2 per cent, respectively. Last year, while electricity output rose 13.7 per cent, mining output also went up 4.2 per cent during July.

The higher cumulative growth during April-July, 2005 was mainly due to manufacturing sector output that went up by 10.4 per cent against last year's 8.2 per cent growth.

Pulled down by the July performance, the growth in both electricity and mining sectors during the first three months of the year has also slowed down.

Electricity output during the period slowed down to 5.3 per cent compared to 7.9 per cent the same period last year.