India's industrial output contracted for the sixth straight month in August, with mining and manufacturing witnessing a steep fall in output over a year ago.
The Index of Industrial Production contracted 8% in August compared with a fall 10.77% in July, according to official data released by the government. A Bloomberg poll forecast a contraction of 7.8% in industrial output in August.
Sectoral Estimates
For August, output fell across all three broad classifications.
- Mining output fell 9.8% in August compared to a fall of 12.8% in July.
- Manufacturing output fell 8.6% in August compared to a fall of 11.6% in the previous month
- Electricity generation fell 1.8% in August compared to a drop of 2.5% in July.
Industrial output, as classified by the end-use of goods, also showed a fall in output across all categories, including consumer non-durables that had seen a rebound in July.
- Primary goods output growth fell 11.1% in August compared to 10.7% in July.
- Capital goods output fell 15.1% in August, better than the 22.8% fall seen in July.
- Intermediate goods output fell 6.8% in August, an improvement over the 11.6% drop in July.
- Infrastructure and construction goods output fell 2.3% in August, compared to an 8.6% fall in July.
- Consumer durables output fell 10.3% in August, a smaller drop compared to the 23% fall seen in July.
- Consumer non-durables output fell 3.3% in August after a 1.8% rise in July.
Use-based classification for all the segments registered a contraction in the month of August 2020, said said Sunil Kumar Sinha, principal economist at India Ratings & Research. “Even consumer non-durables which had registered a growth of 1.8% and 14.3% year-on-year in July and June respectively contacted 3.3% in August. However, the positive development is the pace of contraction (except primary goods) is showing significant slowdown,” he said.
Sinha added that though economic activity are yet to reach pre-covid levels, it is gaining traction with each passing month albeit at a reduced pace, Sinha said.
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