June industrial output grows at 8.8% vs 5.9% in May

Industrial output numbers for June has beaten street expectations. Industrial growth revived moderately to 8.8% in June this year on the back of a smart recovery in the manufacturing sector and better offtake of capital goods. Growth in factory output, as measured in terms of the Index of Industrial Production (IIP), stood at 7.4% in June last year, as per government data released here.

A CNBC-TV18 poll indicated IIP to have grown by 5.7% compared to 5.6% in May.

During the first quarter (April-June) this fiscal, IIP growth stood at 6.8%, as against 9.6% in the corresponding three-month period last year. Output of the manufacturing sector, which constitutes over 75% of the index, grew by 10% in June, 2011, compared to 7.9% in the same month last year.

Offtake of capital goods jumped by 37.7% in June, 2011, in comparison to a growth of merely 3.7% in theprevious year. Similarly, electricity production also improved, witnessing a growth of 7.9% during the month under review, as compared to a growth of 3.5% in June, 2010.

However, growth in mining sector output declined to a mere 0.6% in June, 2011, from 6.9 per cent in the same month last year.

Non-durable consumer goods (FMCG) production also saw a slowdown in growth to 2.1% in June, compared to 7.5% expansion a year ago, while growth in consumer durables output also fell sharply to just 1% from 21.2% a year ago.

Meanwhile, the industrial growth number for May this year has been revised upward to 5.9% from the provisional estimate of 5.6%.

As per the latest data, industrial growth during the April-June quarter stood at 6.8% compared to a growth of 9.6% in the first quarter of last fiscal.

The slowdown could be attributed to a weaker performance in April and May 2011, when the IIP growth stood at 5.7% and 5.9%, respectively. Manufacturing sector grew by 7.5% in April-June this year as against a growth of 10.3% in the same period of 2010.

Growth in mining also fell to a mere one per cent during the first quarter of the current fiscal from a 8% jump registered in the year-ago period. Offtake of capital goods grew by 16.9% in April-June this year as against a growth of 17.2% in the year-ago period.

Consumer non-durables witnessed a growth of 4.9% during the period under review as compared to 5.3% in April-June 2010, while consumer durables grew by only 3.3% as against 19.7%. However, electricity output increased by 8.2% during the first quarter of this fiscal as against a growth of 5.4% in the same period of last year.

Sector-wise growth indicator

• Manufacture sector growth at 10% Vs 7.9% (YoY)
• Mining sector growth at 0.6% Vs 6.9% (YoY)
• Capital sector goods growth at 37.7% Vs 3.7% (YoY)
• Electricity sector growth at 7.9% Vs 3.5% (YoY)
• Basic goods growth at 7.5% Vs 3.7% (YoY)
• Intermediate goods growth at 1.9% Vs 8.5% (YoY)
• Consumer goods growth at 1.6% Vs 13.3% (YoY)
• Consumer durables goods growth at 1% Vs 21.2% (YoY)

(With inputs from PTI)