Industrial output picks up in July

India's industrial production grew at a much faster pace than anticipated in July, as improved performance of the manufacturing and mining segments offset a decline in electricity generation, the Government said. The index of industrial production (IIP) rose to 273 in July from 255 in the same month a year ago, data released by the Commerce Ministry showed. This translates into a growth of 7.1% as against 8.3% in July 2007. July's IIP figures are better than June, when the industrial output had expanded by 5.4%. The data was also higher than average estimates that ranged between 6-6.5%.

Growth in the manufacturing sector, which accounts for the majority of the IIP, stood at 7.5% in July versus 8.8% in the year-ago period. The mining sector grew at 5% in July as against 3.2% in the same month a year earlier. Electricity was a big disappointment, as its growth slipped to 4.5% in July from 7.5% in July 2007.

Industrial output rose by 5.7% in the first four months of the current fiscal year compared with 9.7% in 2007-08.

Growth in Capital Goods jumped sharply in July to 21.9% versus 12.3% in the same month last year. Consumer Goods sub-segment grew by 7.3% in July as against 7.1% in the year-ago period. Consumer Durables rebounded to register an impressive growth of 11.2% versus a contraction of 2.7% in July 2007. Consumer Non-durables sub-segment witnessed a sharp drop, to 6.1% from 10.5% in the same month last year.

As many as 10 of the 17 industry groups showed a positive growth during July compared to the year-ago period. 'Beverages, Tobacco & Related Products’ showed the highest growth of 28.6%, followed by 18.7% in ‘Transport Equipment & Parts’ and 16% in ‘Machinery & Equipment’. On the other hand, 'Wool, Silk & Man-made Fibre Textiles’ showed a negative growth of 9.2% followed by a decline of 9.1% in ‘Wood and Wood Products’ and a drop of 4.9% in ‘Leather and Fur Products‘.