Industrial growth slows as mining contracts and manufacturing, electricity output lose momentum
India’s industrial output growth slowed to 6.7 per cent in July as mining activity slipped into contraction and the pace of expansion in manufacturing and electricity generation eased, official data showed on Friday.
The growth was down from a revised 8.8 per cent in June, although it came in above the 6 per cent expansion forecast by economists in a Reuters poll.
Manufacturing output, the biggest component of the Index of Industrial Production (IIP), grew 7.3 per cent year-on-year in July, slowing from a revised 9.5 per cent increase in June.
Electricity generation rose 8.7 per cent, against revised growth of 11.3 per cent in the previous month.
Mining was the weakest of the three major sectors, with output contracting 0.9 per cent in July after expanding a revised 1.6 per cent in June.
The July data showed a mixed picture across use-based industries. Capital goods output, a closely watched indicator of investment activity, rose a robust 16.1 per cent from a year earlier, though the pace was slower than the revised 17.9 per cent growth recorded in June.
Consumer durables output, which includes products such as cars and mobile phones, rose 10.5 per cent, marginally faster than the revised 10.3 per cent increase a month earlier.
More from BusinessBut consumer non-durables, including food products and toiletries, contracted 1 per cent in July, reversing a revised 5.6 per cent expansion in June.
For the first four months of the financial year, industrial output grew 6.3 per cent, compared with 4 per cent during the same period a year earlier.
The July reading marks a moderation after the stronger growth seen in June, with the contraction in mining and slower expansion in the manufacturing and electricity sectors pulling down the headline number.
Still, the strength in capital goods and consumer durables suggests investment-linked activity and demand for big-ticket consumer products remained firm during the month, even as growth in other parts of the industrial economy lost momentum.
The government had also changed the basis for calculating factory output inflation in May, shifting to producer prices from wholesale prices.
