Showing no signs of recovery, factory production remained in negative territory for the second month in a row, contracting 0.5 per cent in March due to declining output in manufacturing, especially capital goods.

Output as measured by the index of industrial production (IIP) remained almost flat in 2013-14 and declined 0.1 per cent compared with an expansion of 1.1 per cent in 2012-13. The IIP showed growth of 3.5 per cent in March 2013.

IIP data for February was revised to a contraction of 1.8 per cent as against a dip of 1.9 per cent, according to information released by the Central Statistics Office (CSO).

Factory output started to decline in October, when the IIP contracted 1.2 per cent, and continued till December. It entered the positive zone in January and slipped into negative territory again in February.

Manufacturing, which constitutes over 75 per cent of the index, declined 1.2 per cent in March against growth of 4.3 per cent a year earlier.

During the April-March period of 2013-14, the sector's output contracted 0.8 per cent compared with 1.3 per cent growth previously.

Production of capital goods, a barometer of demand, shrank 12.5 per cent, in sharp contrast to an expansion of 9.6 per cent in the same month in 2013. The segment declined 3.7 per cent in 2013-14 over a contraction of 6 per cent in the comparable period.

Overall, 12 of the 22 industry groups in manufacturing showed negative growth in March as compared to the corresponding month of 2013.