Worrying: India's industrial output slips to 13-month low in October
What's the story
India's industrial production growth has slumped to a 13-month low of 0.4% in October, official data from the Ministry of Statistics and Programme Implementation (MoSPI) showed today. The slowdown is due to contractions in manufacturing, mining, and electricity output. The latest figure is much lower than the 3.7% growth recorded during the same period last year.
Market conditions
Industrial activity shows uneven recovery
The latest data indicates a fragile and uneven recovery in industrial activity, owing to weak domestic demand, global uncertainties, and sector-specific problems. The industrial performance has been inconsistent this fiscal year, slowing down in Q1 (April-June) before picking up pace from July. India's core infrastructure sector, which contributes over two-fifths of industrial output, recorded zero growth in October with flat production year-on-year.
Sector performance
Manufacturing sector's growth slows down
The manufacturing sector, which contributes nearly 78% to the Index of Industrial Production (IIP), grew by 1.8% year-on-year in October. This is a decline from September's growth of 5.6% and last year's revised figure for October of 4.4%. Mining output also contracted by 1.8% year-on-year in October, compared to a modest rise of 0.9% recorded during the same period last year.
Energy sector
Electricity generation contracts in October
Electricity generation saw a contraction of 6.9% in October, compared to a growth of 3.1% in September and 2% during the same period last year. The data reflects the challenges faced by key sectors contributing to India's industrial output amid an uneven recovery process.
Sectoral growth
Capital and infrastructure goods see growth
Despite the overall slowdown, capital goods production rose by 2.4% in October, down from last month's growth of 4.4%. Intermediate goods output also saw a marginal increase of 0.9% year-on-year during this period, compared to a higher annual growth rate of 6.3% recorded last month. Infrastructure/construction goods output increased by an impressive 7.9%, lower than September's robust figure.