Industrial Production Growth Slows to 4-Month Low of 2 % in June

India’s industrial production growth slipped to a four-month low of 2 percent in June, mainly due to the poor performance of the mining and the manufacturing sectors. 

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India's industrial production growth slipped to a four-month low of 2 percent in June, mainly due to the poor performance of the mining and the manufacturing sectors, according to government data which was released on Friday, 9 August.

Factory output, as measured by the Index of Industrial Production (IIP), had expanded by 7 percent in June 2018.

The previous low in IIP growth was in February 2019, when it had inched up 0.2 percent. Thereafter, IIP grew at 2.7 percent in March, 4.3 percent in April and 4.6 percent in May this year.

According to data released by the Ministry of Statistics and Programme Implementation, industrial output grew at 3.6 percent in the April-June quarter this fiscal, down from 5.1 percent growth a year ago.

In Detail

There was a slowdown in the manufacturing sector, which grew at 1.2 percent in June 2019 as compared to 6.9 percent a year ago.

Capital goods segment, which is a barometer of investment, saw a contraction of 6.5 percent in June compared to 9.7 percent growth a year ago.

Mining growth dropped to 1.6 percent in June from 6.5 percent in the corresponding month of the last fiscal.

The expansion in power generation sector stood at 8.2 percent, compared to 8.5 percent earlier.

As per use-based classification, primary goods segment grew 0.5 percent, intermediate goods 12.4 percent and infrastructure/construction goods (-) 1.8 percent in June 2019.

Consumer durables and non-durables recorded growth of (-) 5.5 percent and 7.8 percent, respectively.

In terms of industries, 8 out of 23 industry groups in the manufacturing sector have shown positive growth during June as compared to the same month a year ago.

The industry group 'Manufacture of basic metals' showed the highest growth of 17.7 percent, followed by 16.5 percent in food products and 10.3 percent in tobacco products.

On the other hand, the industry group Manufacture of paper and paper products witnessed the highest negative growth of (-) 19.9 percent, followed by (-) 14.3 percent in 'Manufacture of furniture' and (-) 13.9 percent in 'Manufacture of motor vehicles, trailers and semi-trailers'.