June Factory Output Slows to 5-Month Low at 2.1%

India's industrial production index expanded at 2.1 percent in June against the Bloomberg estimate of 1.5 percent. The June growth was higher than 1.1 percent (revised from 1.2 percent provisionally) in May.

However, it fell from 4.2 percent growth recorded a year ago, on account of poor show by manufacturing and heavy contraction in capital goods production.

According to data from the Central Statistics Office, the production output of capital goods, which are goods required for input in production of other goods, saw a decline of 16.5 percent from the corresponding month, a year ago.

On cumulative basis, the factory output in the April-June quarter grew by 0.6 percent compared to 3.3 percent growth in the year-ago period.

Other Highlights

• The manufacturing sector that constitutes over 75 percent of the index saw a growth of 0.9 percent in June compared to 5.2 percent a year ago.
  
• The capital goods output registered a steep decline of 16.5 percent in June over a contraction of 2 percent in last year.
  
• Growth in output of consumer durables decelerated to 5.6 percent in June compared to 16.1 percent a year ago.
  
• The consumer non-durable goods also recorded low growth of 1 percent in June compared to 2.3 percent a year ago.
  
• Overall, consumer goods production recorded a growth 2.8 percent in June compared to 7.2 percent a year ago.
  
• Power generation recorded an impressive growth of 8.3 percent in June compared to 1.2 percent in the same month a year ago.
  
• The mining sector recorded a growth of 4.7 percent in June year as against a contraction of 0.4 percent a year ago.
  
• In terms of industries, 18 out of 22 industry groups in the manufacturing sector have shown positive growth during the month of June.
  

Also Read: Retail Inflation Rises For Fifth Straight Month in July to 6.07%