- Contraction in manufacturing leads to plunge in industrial output growth
- In manufacturing, industrial production shrinks 0.4% in November
- October industrial production growth revised to 8.4% from 8.1%
Industrial production growth stood at 0.5 per cent in November, the government said on Friday, largely due to a contraction in manufacturing activity. That marked the slowest rate of growth in industrial production recorded since June 2017. The industrial production or factory output, determined by Index of Industrial Production (IIP), also missed economists' expectation by a large margin.
Economists had forecast growth of 4.1 per cent in industrial production in November, according to a poll by news agency Reuters.
The growth in industrial production in October was revised upwards to 8.4 per cent, from 8.1 per cent, the data from the Central Statistics Office (CSO) showed.
In the category of manufacturing, which has a weightage of 77.6 per cent on the index, the production contracted 0.4 per cent in November. Growth in manufacturing had stood at 8.2 per cent in the previous month, and 10.4 per cent in November 2017, the data showed.
“The decline was mainly on account of fall in manufacturing primarily in sectors such as metals, motor vehicles etc,” said B Prasanna, head global markets group, ICICI Bank.
Growth in mining and electricity stood at 2.7 per cent and 5.1 per cent in November respectively. Mining has a weightage of 14.4 per cent on the Index of Industrial Production.
Industrial production grew 5 per cent in the first eight months of the current financial year (April-November) the government noted in its statement. Overall growth had stood at 3.2 per cent in the corresponding period of the previous fiscal year.
GDP or gross domestic product growth fell to a worse-than-expected 7.1 per cent in the July-September quarter. Most private economists have lowered the country's growth forecast to around 7 per cent for the financial year citing weakening consumption and slowdown in credit offtake.
(With agency inputs)