Factory output moderated to a four-month low in September at 3.6 per cent compared with the revised 6.2 per cent growth registered by the industrial production in August, as the manufacturing and consumer non-durable sectors posted poor performance during the period.
According to the index of industrial production (IIP) data released by the ministry of statistics and programme implementation, only half of the 22 industry groups showed growth during the month while the consumption demand declined, reflected in the 4.6 per cent contraction witnessed by consumer non-durable goods production in September compared with a growth of 1.3 per cent during the same period last year and 0.4 per cent growth last month.
The data showed that the cumulative growth during the April-September period stood at 4 per cent compared with 2.9 per cent during the year-ago period.
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As per the sectoral classification, while the manufacturing sector grew 2.6 per cent during the month compared to 2.7 per cent during the same period last year and a robust 6.9 per cent growth clocked in last month, the mining sector witnessed a growth of 3 per cent in production in September as against 0.1 per cent in the corresponding period last year and 3.8 per cent in August 2015.
India Inc said that despite the moderation, the industrial growth is likely to pick up in the third quarter, largely due to the festive season demand.
“We expect a pick up in the third quarter. Data indicate that demand for products such as passenger cars and two-wheelers have been strong in the run-up to the festive season. CII expects a significant recovery in consumer demand in the second half on the back of lower interest rates. Investment demand is also picking up, as public sector projects are being implemented by the government,” Chandrajit Banerjee, director general, CII, said in a statement.
During the month, electricity generation witnessed a growth of 11.4 per cent in September, compared to 3.9 per cent in September 2014 and 5.6 per cent in August. Mining activity also picked up, as evident by a 3 per cent growth compared to 0.1 per cent growth during the same period last year. However, it was at a slower pace compared to 3.8 per cent achieved in August.
Capital goods production though remained healthy, it grew at a slower pace at 10.5 per cent during the month compared to 12.3 per cent in September 2014 and 21.8 per cent in August.