Industrial growth slips; consumer goods slow down

Industrial growth slipped to 7.6 per cent in December from 13.4 per cent...

Industrial growth slipped to 7.6 per cent in December from 13.4 per cent in the same month of 2006 on account of widespread deceleration in manufacturing, mining and electricity, among other sectors. The consumer goods sector, in addition to other segments of industry like basic goods and capital goods, too witnessed a slowdown in growth during the month, showed the quick estimates of the Index of Industrial Production IIP released today.

The slippage in the rise in industrial output in December can be attributed mainly to the manufacturing sector growth rate, which decelerated to 8.4 per cent from 14.5 per cent in the corresponding period of last financial year. The mining and electricity sectors too performed poorly during the month, recording growth rates of 3 per cent and 3.8 per cent respectively as compared to 6.1 per cent and 9.1 per cent in December 2006.

The cumulative industrial growth rate April-December 2007 also slipped to 9 per cent from 11.2 per cent a year ago, suggesting that the industrial growth rate during the financial year is unlikely to cross the double digit mark. The nine-month growth rate for the manufacturing sector declined to 9.6 per cent from 12.2 per cent in the previous fiscal.

Similarly, the growth rates for mining and electricity sectors worked out to be 4.9 per cent and 6.6 per cent respectively, compared to 4.4 per cent and 7.5 per cent during the corresponding period of 2006-07. The industrial growth rate for November 2007 has been revised downwards to 5.1 per cent from 5.3 per cent reported earlier.

The use-based classification of IIP also shows widespread deceleration in growth. The index for the consumer goods sector fell to 8.7 per cent during December 2007 compared to 10.7 per cent a year ago.

The growth rate of consumer non-durables declined to 10.6 per cent from 13.5 per cent, while consumer durables showed a marginal improvement to 2.2 per cent from 1.8 per cent in December 2006.

The slippage was quite marked in case of basic goods with the growth rate sharply declining to 3.1 per cent in December compared to a high of 12.4 per cent a year ago.

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The output of capital goods, however, showed a healthy growth of 16.6 per cent during the month, though down from a high of 26.2 per cent recorded in the year-ago period. The index of intermediate goods declined to 7.2 per cent in December from 12.7 per cent in the corresponding month in the previous financial year.

The cumulative growth figures April-December 2007 suggest that output of the consumer durables sector declined by 1.3 per cent compared to a growth of 11.2 per cent during the corresponding period in the previous fiscal. The only sector that showed improvement during the nine-month period was the capital goods sector, which recorded a higher growth rate of 20.2 per cent compared to 18.6 per cent during April-December 2006.