Bettering even the most optimistic forecasts, factory output expanded by an impressive 9.1% in September from 6% a year ago; this performance is on top of a robust 11% in August.
With this, the growth rate of industrial production climbed to 6.5% during H1 of 2009-10; this is higher than what it was during the same period of the preceding year — 5%.
The consumer durables segment, which was the focus of stimulus packages to lift the economy out of the morass, has fared exceptionally well, registering a jump of 22.2% in output during September and of 18.9% during the first six months.
What makes this noteworthy is the fact this incremental growth was despite the handsome increases registered by this segment during the same month and during the same period of 2008-09 —- 14.7% and 7.2%, respectively.
Equally significant, a definite turnaround is discernible in respect of intermediate goods, with the growth rate recovering from (-)2.5% to a double-digit figure of 10.8% over the 12 months ending September 2009; the surge in the first half of the current fiscal is no less striking at 9.5% from a mere 0.4% during the same months of the previous year.
But, the showing of the consumer non-durables segment — which has a much larger weight relative to consumer durables in the industrial index — has been lacklustre thus far; the momentum of output had flagged to 2.6% in September 2009 from 4.8% a year ago and to (-) 0.5% from 7.7% between the first half this year and the preceding one.
Consequently, consumer goods as a whole does not seem to be out of the woods; though the year-on-year rise was higher at 8.2% during the latest month than what it was a year ago — 7.4%, during the first half, the growth rate, at 4.3%, is trailing the 7.6% surge during the same period of 2008-09. The basic goods industry seems to be on the mend with a vastly improved pace of output —- 6.7% in September 2009 as against 5% a year ago and 6.7% in the latest half year compared with 3.9% during the previous corresponding period.
In the case of capital goods, while the performance during the month under review was good with an increase of 12.8% in production — it was much higher at 20.8% in September 2008 — the growth rate had halved to 5.3% during the first half of 2009-10 over the comparable half of the earlier year.
IIP growth in first half a strong 6.5%. If the use-based classification of the industrial index makes a rather mixed reading, the sector-wise analysis yields a distinctly better picture.
The tempo of production in all the three sectors — mining, manufacturing and electricity — both for September 2009 and for the first six months — has been sustained at a higher rate than in the preceding year.
In particular, the heavyweight in the index, manufacturing has seen output surging by 9.3% during the month and by 6.3%% during the April-September period, thereby boosting the overall industrial growth rate to a respectable level so far.
In the aggregate, the industrial output scene is reassuring. Out of the 17 industrial groups at the two-digit level of classification, the number of industries reporting a negative growth has declined to 4 during the first half of the current year from 8 last year and the number that could muster an increase of up to 5% has also fallen to three from four; on the other hand, the number of industrial groupings that had registered a growth rate of between 5% and 8% rose to 4 from 2 and the number that topped 8% had doubled to 6.
Pivotal industries such as basic metals and alloys, basic chemicals, non-metallic mineral products, machinery & equipment and transport equipment have fared well in the latest half year, and their growth rates ranged between 6.8% and 11%.
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