Industrial output in red, contracts 1.9% in October

 Industrial output slipped into the negative territory again with a contraction of 1.9% in October mainly due to sharp decline in production of capital goods and poor performance of manufacturing sector.

After showing decline for two consecutive months of July (-2.5%) and August (-0.7%), factory output, as measured in terms of the Index of Industrial Production (IIP), had grown at 0.7% in September.
For the April-October period, industrial output declined by 0.3% as against a growth of 4.8% a year ago, as per the data released by Central Statistics Office (CSO) today. Factory output grew at a higher rate of 9.9% in October last year mainly driven by better performance of manufacturing sector and increase in output of capital goods by 16.5%.

The manufacturing sector, which constitutes over 75% of the IIP index, recorded a contraction 2.4% in October. Similarly the capital goods output also shrank by 25.9%. In terms of industries, 12 out of 22 groups in the manufacturing sector showed negative growth in October. The mining sector recorded a contraction of 3.1% in October as against a growth of 3.5% a year ago. Power generation recorded a growth of 1.1% in October compared to 5.3% growth in the same month a year ago.

Growth in output of consumer durables went up by just 0.2% in October compared to 41.9% growth a year ago. The output of consumer non-durable goods declined by 3% in October as against 4.8% growth a year ago. Overall, consumer goods production dipped 1.6% in October compared to 18.3% growth a year ago.

As per 'use-based' classification, the growth rates in October 2016 over October 2015 are 4.1% in basic goods, (-) 25.9% in capital goods and 2.9% in intermediate goods.