Manufacturing, mining, power pull IIP to 10.7 in Aug

Industrial production has risen marginally to 10.7 per cent in August as against 10.3 per cent in the same period last year...

Industrial production has risen marginally to 10.7 per cent in August as against 10.3 per cent in the same period last year riding on an improved performance of mining and electricity sectors. Though growth in the manufacturing sector has slightly slipped to 10.4 per cent in August from 11.9 per cent in the same month a year ago, the capital goods sector staged a good 30 per cent growth in the month over 16.6 per cent during the corresponding period a year ago, according to the index of industrial production IIP released by the Central Statistical Organisation.

The cumulative industrial growth during the first five months April-August 2007-08, however, fell to 9.8 per cent from 11 per cent in the year-ago period.

Industrial production, particularly the performance of the manufacturing sector, looks better in August when one takes into account fears of a general slowdown largely influenced by the steps taken to stem inflation and the rising rupee, which has appreciated to a nine-and-a-half year high.

The growth in the manufacturing sector had fallen to 7.2 per cent in July compared with 14.3 per cent in July 2006. Industrial growth had also declined in July 2007 to 7.1 per cent which now has been revised to 7.5 per cent from 13.2 per cent in July 2006. The increasing lending rates had reduced the demand for vehicles and consumer goods, which in turn slowed the manufacturing sectors.

Earlier, the index of six core infrastructure industries, which has a combined weightage of 26.7 per cent in the IIP, had registered a 9 per cent growth in August 2007 compared with 6.6 per cent in the same period last year. This was due to a growth in production of cement, coal and electricity. In terms of industries, as many as 15 out of the 17 industry groups have shown positive growth during August 2007 as compared to August 2006.

Wood and its products and furniture and fixtures have shown the highest growth of 62.2 per cent, followed by 21.8 per cent in 8220;other manufacturing industries8221; and 19.1 per cent in basic metal and alloy industries.

Metal products and parts, except machinery and equipment, have shown a negative growth of 2.6 per cent followed by 2.1 per cent in textile products including wearing apparel.

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The mining sector growth rate improved significantly to 17.1 per cent in August against a decline of 1.7 per cent in the same month last year. Electricity generation during August grew 9.2 per cent as compared to 4.1 per cent a year ago. During April-August, the manufacturing sector growth rate fell to 10.3 per cent from 12.2 per cent a year-ago. The electricity generation and mining sector growth rates rose 8.3 per cent and 5.4 per cent during the five-month period as against 5.7 per cent and 3 per cent respectively a year ago.

The capital goods sector recorded the highest growth of 21.3 per cent during April-August 2007 compared to 19.5 per cent during the corresponding period last year.