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IIP growth slows to 5-month low of 0.4%

Consumer goods output contracted by 6.9 per cent in August as against 0.9 per cent decline a year ago.

By: ENS Economic Bureau | New Delhi | Published: October 11, 2014 1:56:58 am

Dashing hopes of a rebound in industrial activities, factory output remained muted at a five-month low of 0.4 per cent in August this year with contraction in manufacturing.

Official data released on Friday showed that on a cumulative basis the Index of Industrial Production (IIP) grew 2.8 per cent between April and August 2014. The IIP for July has also been revised downwards to 0.41 per cent from the previous 0.5 per cent.

The data reveals that manufacturing, which constitutes 75 per cent of the index, contracted 1.4 per cent in August. For April-August, the sector grew at 1.8 per cent, compared to 0.1 per cent contraction in the year-ago period.

Worryingly, the data also indicated that investments as well as consumer demand are yet to pick up with both capital goods as well as consumer goods registering a decline.

Consumer goods output contracted by 6.9 per cent in August as against 0.9 per cent decline a year ago. While consumer durables contracted 15 per cent, consumer non-durables fell 0.9 per cent.

Capital goods output also dipped 11.3 per cent in August as against 3.8 per cent decline in the previous month. However, on a cumulative basis, the sector grew 4.3 per cent between April-August.

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