India's industrial output in March contracts 0.1%

Manufacturing output, which accounts for more than three-fourths of the entire index, fell 0.4 percent in March, against a robust 5.7 percent growth in the same period a year ago. Mining grew at 0.8 percent in March against a 3.1 percent growth in March 2017-18. Electricity production grew 2.2 percent in March against 5.9 percent in the same period a year ago.

Of the other high-frequency indicators, data released by the Society of Indian Automobile Manufacturers (SIAM) last month signaled a slowdown in urban demand as car sales grew 2.7 percent in 2018-19, the worst performance in five financial years.

“The figures are lower than anticipated, but in line with the other indicators, which is showcasing that there are signs of slowdown in the economy. So we need to be a little watchful of that. Maybe it’s a pre-election phenomenon. Whether it’ll last a little long needs to be seen,” said Tushar Arora, senior economist, HDFC Bank said.

Capital goods output, which is a proxy to measure private sector investment activity, fell 8.7 percent in March.

Primary goods grew at 2.5 percent in March, a fall from a growth of 3 percent in the same period a year ago. Intermediate goods contracted 2.5 percent from a growth of 2.5 percent a year ago.

“Declining growth of primary goods and deepening contraction of intermediate goods, and weakness in both investment and consumption activities suggests very fragile industrial activities in near term,” said Devendra Kumar Pant, chief economist and senior director, India Ratings and Research.

Consumer durables contracted 5.1 percent MoM, as compared to a 1.2 percent MoM growth seen in February. The consumer non-durables sector saw a growth of 0.3 percent MoM, as compared to 4.3 percent MoM growth seen in February.

Infrastructure output, which comprises eight sectors - such as coal, crude oil and electricity - accounts for nearly 40 percent of India's industrial output.