After 3 months of contraction, factory output grows 2% in February

Industrial production grew 2% year on year in February after staying negative for the last 3 months on better performance of mining, power and consumer goods, a proof that economic recovery is holding up.

Factory output measured in terms of the index of industrial production (IIP) declined 3.4% in November, 1.2% in December and 1.5% in January, data released by the Central Statistics Office (CSO) showed.

The index had registered a growth of 4.8% in February last year, it said. During April-February, industrial output grew at 2.6% compared with a growth of 2.8% in the year-ago period. The growth in February has come on top of improvement in output of consumer durable goods, which grew 9.7% in February as against a contraction of 3.8% in the same month a year ago.

The manufacturing sector, which constitutes over 75% of the index, grew at 0.7% against a growth of 5.1% in February 2015. Mining too shaped up, logging a growth of 5% as against a growth of 1.6% in same month a year ago.

Power generation accelerated, growing 9.6% compared with 5.9% growth a year earlier. As per use-based classification, basic goods reported a growth of 5.4% as against an expansion of 4.9 last year.

However, capital goods, a barometer for investment flow, contracted 9.8% in February compared with a growth of 8.3% in the year-ago period. The overall consumer goods output grew at 0.8 as against a growth of 4.9%.

The consumer non-durable segment contracted 4.2% in February as against a growth of 10.5% in the corresponding month. In terms of industries, 16 out of the 22 industry groups in the manufacturing sector showed a positive growth in February.