Industrial output bounces back in January

Capital goods, mining remain weak

 After two months of decline, India’s industrial production bounced in January, backed by an expansion in manufacturing sector, but the building blocks of industry such as capital goods and mining remained in a contracting mode, indicating a sustained industrial recovery being far away.

 The index of industrial production rose 2.4 per cent from a year earlier, following a 0.5 per cent contraction in December, official data showed on Tuesday.

 Growth in manufacturing sector, which constitutes over 75 per cent of the index, grew by 2.7 per cent in January, against 1.1 per cent in the same month of 2012. But, capital goods output, a key investment indicator, declined 1.8 per cent and mining contracted 2.9 per cent.

 Analysts and India Inc said the growth in manufacturing may have been due to a weak production number in the same month last year.

"The growth in the industrial and manufacturing sector remains an area of concern as positive growth of 2.4 per cent comes over a low base," FICCI President Naina Lal Kidwai said. “With 50 per cent of manufacturing sectors registering negative growth, any sustained growth remains elusive in the sector in the immediate future," Kidwai added.

CII president Adi Godrej said ,“While some signs of revival of industrial activity are indicated, it is too early to assume that the slowdown has bottomed out and green shoots of recovery are around the corner. If we factor in the base effect, the performance of industry is still below potential.”
Industrial output has contracted in six of the 10 months of this fiscal year. Though consumer goods production grew 2.8 per cent, consumer durables remained in trouble. A weak consumer demand is also evident from the disappointing car sales data for February and India’s largest car maker Maruti suspending production of cars in one of its plants for a day last week.
DH News Service