May industrial growth slows down to 5.6% YoY

Industrial growth has slowed down in May. Index of Industrial Production (IIP) has come in at 5.6% on a year-on-year basis. However, according to CNBC-TV18 poll May IIP was expected to be at 8.6%.

The sluggishness in May IIP is mainly due to the poor performance of the manufacturing and mining sectors.

According to data released here, industrial growth in April-May this year averaged 5.7%, compared to 10.8% in the same period last year.

The manufacturing sector, which accounts for over 75% of the total weight of the index, grew by just 5.6% in May, 2011, as against 8.9% in the same month of 2010.

Similarly, the mining sector grew by a meagre 1.4% in May, 2011, as against 7.9% in the same month last year.

Another area of concern was poor offtake of capital goods, which grew by just 5.9% during the month under review as compared to 15.8% in the corresponding period of the previous year.

Growth in output of intermediate goods also registered a sharp decline to 0.9% in May from 11.7% in the corresponding year-ago period.

Overall, consumer goods saw lower growth of 5.4% in May, 2011, as against 7.4% in May, 2010.

The IIP performance is even worse as per the old series of index, with a base year of 1993-94, which recorded industrial growth at 3.6% in May, 2011, as against 12.2% in the same month last year.

The new series with a 2004-05 base was introduced in April.

(With additional inputs from PTI)