Manufacturing, Consumer Durables Pull Down IIP To 3.8% In Sep
Poor showing by the manufacturing sector coupled with decline in consumer durables output pulled down the Index of Industrial Production (IIP) to 3.8 per cent in September.
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Factory output rose 5 per cent in September 2016 and 4.5 per cent in August this year, data released by the Central Statistics Office (CSO) showed today.
According to the data, IIP grew at a meagre 2.5 per cent in April-September this fiscal compared to 5.8 per cent in the first half of 2016-17. In September, growth in the manufacturing sector, which accounts for 77.63 per cent of the index, slowed to 3.4 per cent, from 5.8 per cent a year earlier. During April- September, manufacturing grew at 1.9 per cent, down from 6.1 per cent in the same period last fiscal.
Consumer durable goods output contracted by 4.8 per cent in September as against a growth of 10.3 per cent in the previous year. During the first half of this fiscal, the output of these goods declined by 1.5 per cent as against a growth of 6.9 per cent last year. Electricity generation growth slipped to 3.4 per cent in September compared to 5.1 per cent a year before. However, mining recorded a growth of 7.9 per cent in the month under review as against a contraction of 1.2 per cent a year ago.
According to the use-based classification, growth rates in September 2017 came in at 6.6 per cent for primary goods, 7.4 per cent for capital goods, 1.9 per cent for intermediate goods and 0.5 per cent for infrastructure/construction goods compared to the previous year.
The consumer non-durable segment has recorded a growth of 10 per cent. Rating agency Crisil said that although capital goods grew by 7.4 per cent in September, "it is on a very low base, so it may be premature to suggest a revival in investment activity.
"Consumer non-durables continued to march ahead, growing 10 per cent, which suggests buoyant rural demand. Durables, on the other hand, de-grew (-4.8 per cent), reflecting to some extent still fragile urban demand." In terms of industries, 11 out of 23 industry groups in the manufacturing sector have shown positive growth in September 2017 as against the previous year.
According to another rating agency Icra, the momentum of post-GST restocking recorded in August 2017 did not sustain in the subsequent month despite the impending festive season.
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