17-month low! Industrial growth falls - Here is why it happened

Industrial output growth dropped to a 17-month low of 0.5 per cent in November on account of contraction in manufacturing sector, particularly consumer and capital goods. Factory output as measured in terms of the Index of Industrial Production (IIP) had grown by 8.5 per cent in November 2017, as per data released by the Central Statistics Office (CSO) Friday. The previous low was in June 2017, when IIP growth contracted by 0.3 per cent.

The growth for October 2018 was revised upwards to 8.4 per cent from 8.1 per cent. During the April-November period, industrial output grew 5 per cent as compared to 3.2 per cent in the same period of the previous fiscal. The manufacturing sector, which constitutes 77.63 per cent of the index, recorded a contraction of 0.4 per cent in November as against a growth of 10.4 per cent a year ago.

The mining sector posted 2.7 per cent growth during the month as against 1.4 per cent in November 2017. Power sector output also grew by 5.1 per cent from 3.9 per cent a year ago. Capital goods output declined by 3.4 per cent, compared to 3.7 per cent growth a year ago.

Consumer durables output also dipped by 0.9 per cent as against a growth of 3.1 per cent a year earlier. Consumer non-durable goods also saw a contraction of 0.6 per cent as compared to 23.7 per cent growth a year ago.

In terms of industries, 10 out of 23 industry groups in the manufacturing sector showed positive growth during November 2018.

As per use-based classification, the growth rates in November 2018 over November 2017 are 3.2 per cent in primary goods, (-) 4.5 per cent in intermediate goods and 5 per cent in infrastructure/construction goods.