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Statsguru: Manufacturing activity shows upward trend, trade deficit falls

Industrial output grew at a modest 6.6 per cent in July, shows the latest data released by the MOSPI

Ishan Bakshi 

manufacturing sector

Industrial output grew at a modest 6.6 per cent in July, showed the latest data released by the ministry of statistics and programme implementation (MOSPI). While growth was marginally lower in the previous month (Chart 1), it was well above analysts’ expectations.

Manufacturing activity continued its upward momentum, with the segment growing by 7 per cent in July, up from 6.7 per cent in the previous month (Chart 2). Only six of the 23 sub-sectors within manufacturing recorded a year-on-year contraction. Surprisingly, the capital goods segment slowed to 3 per cent from 9.8 per cent in the previous month.

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On the other hand, as seen in Chart 3, the consumer durables segment maintained its growth momentum, with even non-durables production picking up.

On the inflation front, the retail inflation rate, as measured by the (CPI), cooled further in August. As shown in Chart 4, the rate moderated to 3.69 per cent in August, down from 4.17 per cent in July, with even the core inflation rate, which had remained sticky so far, declining to 5.9 per cent in August from 6.3 per cent the previous month (Chart 5).

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On the trade front, the data from the ministry of commerce and industry showed that exports grew at a healthy 19.2 per cent in August, up from 14.3 per cent in the previous month, while import growth dipped marginally (Chart 6). A closer look revealed that exports of readymade garments continued to contract even as the growth of non-oil, non-gold merchandise imports rose by a robust 12.8 per cent. As a result of this, the trade deficit dipped marginally to $17.4 billion in August from $18 billion in the previous month (Chart 7).

StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines; Compiled by BS Research Bureau

First Published: Mon, September 17 2018. 02:07 IST