Factory output nudges up after shrinking for 3 monthshttps://indianexpress.com/article/business/business-others/factory-output-nudges-up-after-shrinking-for-3-months/

Factory output nudges up after shrinking for 3 months

Power generation and mining output improves; manufacturing dips.

After three months of contraction, factory output inched up in January, growing 0.1 per cent, as production in the mining and power sectors improved slightly.

The index of industrial production (IIP), a barometer for growth in factory output in the country, however, remained flat during the April-January period, reflecting sluggish economic activity throughout the current fiscal.

According to the IIP data released today, production in the mining sector grew 0.7 per cent during the month compared to a contraction of 1.8 per cent during the corresponding period a year ago. It had grown 0.4 per cent in December. Electricity generation, in January, also improved marginally, growing 6.5 per cent compared to 6.4 per cent during the year-ago period. It however had grown 7.5 per cent last month.

Experts said that though the recovery is not decisive, it is certainly a “mild lift” for the industrial production.

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“It is hard to say what the IIP would be for the first half but it will certainly stay positive for the next two months. The PMI is also showing improvement. In the last quarter it will improve. I think IIP should be between 0-0.5 per cent for the financial year 2013-14,” DK Joshi, chief economist, Crisil, said.

The HSBC India Manufacturing Purchasing Managers’ Index (PMI), a measure of factory production, stood at 52.5, up from 51.4 in January, indicating a solid and stronger improvement in business conditions across the country’s manufacturing sector. A PMI reading above 50 indicates growth while a lower reading means contraction.

The IIP data showed that the manufacturing sector during January continued on the contraction trajectory, shrinking 0.7 per cent compared to growth of 2.7 per cent during the same period a year ago. The sector has been contracting for the last three months.

At 8.1%, retail inflation hits 25-month low

New Delhi: Easing onion and potato prices pulled retail inflation in February to a 25-month low of 8.1 per cent and is likely to increase the clamour for the Reserve Bank to cut interest rates in its next monetary policy.

Overall inflation in the food basket, including beverages, slowed to 8.57 per cent in February from 9.9 per cent in the previous month, according to Consumer Price Index (CPI) data released by the government on Wednesday. The rate at which vegetable prices increased eased to 14.04 per cent as against 21.91 per cent in January.

Prior to the month under review, the lowest CPI was recorded in January 2012 at 7.65 per cent. PTI