July 11, 2020 12:55:24 am
Factory output continued to remain in the negative territory for the third consecutive month, contracting sharply by 34.7 per cent in May, but marked an improvement over last month’s revised contraction of 57.6 per cent, data released by National Statistical Office (NSO) on Friday showed. The government said May’s Index of Industrial Production (IIP) numbers reflect a “graded pickup” in industrial activity, even as economists pointed to an uneven recovery amid rising infections and localised lockdowns in many states.
Easing of lockdown conditions in May was reflected in a pick-up in manufacturing, capital goods, consumer durables and consumer non-durables output. Manufacturing sector recorded a contraction of 39.3 per cent in May as against a contraction of 67.1 per cent in April, while the mining sector contracted 21 per cent as against 27 per cent last month. Capital goods output contracted 64.3 per cent in May as against 92.6 per cent contraction in April.
A sharp recovery was seen for infrastructure/construction goods output, for which the contraction halved to 42 per cent in May from 84.7 per cent in April. Consumer non-durables, mainly comprising fast-moving consumer goods, recorded a sharp recovery with contraction of 11.7 per cent in May from 48.7 per cent contraction in the previous month.
The NSO said as part of the preventive measures for the pandemic, the “majority of the industrial sector establishments were not operating from the end of March 2020 onwards”. “This has had an impact on the items being produced by the establishments during the period of lockdown and the subsequent periods of conditional relaxations in restrictions,” it said.
The IIP for April was revised to 57.6 per cent in April from 55.5 per cent estimated earlier. With the government not releasing the industrial growth percentage figures for two months and stating that indices for the two months of April and May should not be compared with the pre-COVID months, it remains to be seen how it would estimate GDP for the April-June quarter. The GDP data for the first quarter is scheduled to be released on August 31. “The weighted response rate at time of QE of April 2020 was 87 per cent which is now revised upwards to 91 per cent at first revision,” the NSO said.
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