Factory output rebounds in November

Factory output increased 3.8 per cent during November, recovering from 4.2 per cent decline in the preceding month, or 1.3 per cent erosion during this month a year ago. Even as the feat should gladden the hearts of policymakers, we may point out that the decline in October was partly a statistical phenomenon, as the month in this year, as compared to the same in 2013, apparently had fewer working days due to Diwali festival.

In what is particularly welcome in the industry feat in November, all the three major segments were into positive growth phase during the month; mining increased by 3.4 per cent, manufacturing 3 per cent; and electricity a robust 10 per cent. Capital goods index increased 6.5 per cent, over stagnation a year ago. Consumer non-durables increased 6 per cent (2.2 per cent), even as consumer durables remained in the negative zone. Basic goods (7 per cent) and intermediate goods (4.3 percent) also recorded improvement upon their respective year-ago performance.

Taking the cumulative data that would even out month-to-month volatility, improvement in industrial production, though subdued, is unmistakable. Total factory production index showed 2.2 per cent (0.1 per cent) increase during April-November period. Manufacturing expanded 1.1 per cent (decline of 0.4 per cent) and mining 2.5 per cent (decline of 2.1 per cent). Electricity rose by 10.7 per cent, twice the rate in the comparable period a year ago. In mining, coal production increased 9.4 per cent, six times the pace during April-November 2013; the decline in crude oil and natural gas has got reduced.

In manufacturing, six out of 22 major industries (at two-digit NIC levels) declined y-o-y during November, and eight over April-November. The steepest decline of 60 per cent during the month was recorded in radio, TV and communication equipment; cumulatively, the erosion was placed at 53 per cent. Electrical machinery recorded 6.7 per cent increase during November and 20 per cent cumulatively. Basic metals and other non-metallic mineral products increased 11.5 per cent and 5.4 per cent, respectively, during April-November period. Transport equipment increased 10.1 per cent. The growth rate in wearing apparel, dressing material, etc speeded from 2.5 per cent in September to 9.6 per cent in October and 19.8 per cent in November lifting the cumulative growth to positive zone. Refinery production declined 0.5 per cent during April-November 2014.

In use-based classification, basic goods index increased 7.5 per cent during the first eight months of ongoing fiscal, against 1.2 per cent during the corresponding period of 2013-14. Capital goods that cater to project investment increased 4.9 per cent (decline of 0.1 per cent). Among the other material inputs in project execution, cement production increased 8.5 per cent, twice the rate in the same period in 2013-14, whereas alloy and non-alloy steel production 11.7 per cent to 2.2 per cent. Intermediate goods increased 1.8 per cent (2.8 per cent) and consumer non-durables 1.9 per cent (6.2 per cent). Consumer durables, which include scooters, cars, gems and jewellery etc., sank deeper in red.