Showing signs of sluggishness in the economy, India’s industrial production contracted 4.3% in September, the weakest performance in seven years, due to output decline in manufacturing, mining and electricity sectors, according to official data released on Monday.
According to the Central Statistics Office (CSO) data, the 4.3% contraction is the lowest in 2011-12 series of Index of Industrial Production (IIP), which was unveiled in May 2017. The IIP had declined by 0.75 in April, 2012.
This was a second straight month of contraction, after a decline of 1.1% in August 2019. In September 2018, India’s factory output had expanded 4.6%.
Also read: India’s Factory Output Contracts for First Time in 21 Months
The 1.1% reduction in August had been an 81-month low, mainly on account of a contraction in manufacturing output and a deepening slowdown in capital goods production pulling down growth. According to the data released on Monday, the IIP contraction in August was further revised downwards to 1.4%.
During April to September, the IIP growth remained almost flat at 1.3% compared to 5.2% in same period last financial year.
A slowdown was witnessed in the manufacturing sector, which declined by 3.9% in September as compared to 4.8% growth a year ago.
The power generation sector output dipped 2.6% in September, compared to 8.2% rise a year ago.
Mining output too fell by 8.5% in September as against 0.1% climb in the corresponding month last fiscal.
Capital goods production, which is a barometer of investment, declined by 20.7% in September compared to 6.9% hike in the year-ago month.
Also read: Industrial Output Shrinks by 1.1% On the Back of Poor Manufacturing Performance
As per use-based classification, the growth rates in September 2019 over September 2018 are (-) 5.1% in primary goods, 7% in intermediate goods and (-) 6.4% in infrastructure/ construction Goods.
Consumer durables and consumer non-durables have recorded growth of (-) 9.9% and (-) 0.4%, respectively.
In terms of industries, 17 out of 23 industry groups in the manufacturing sector have shown negative growth during September 2019 as compared to the same month last year.
The industry group ‘manufacture of motor vehicles, trailers and semi-trailers’ has shown the highest negative growth of (-) 24.8% followed by (-) 23.6% in furniture and (-) 22.0% in fabricated metal products, except machinery and equipment.
On the other hand, manufacturing of wood and products of wood & cork, except furniture; articles of straw and plaiting materials have shown the highest positive growth of 15.5% followed by 9.2% in basic metals.