Factory output stagnated for the second straight month in August. Even as mining and power infrastructure improved, manufacturing went deeper into red. Y-o-Y erosions during July-August brought down the cumulative growth in manufacturing from 3.8 per cent in Q1 to 1.8 per cent by August-end. This feat has also worryingly come after a decline during the first five months of 2013-14.

Mining IIP showed 2.5 per cent growth, but it has come over 3.6 per cent decline during April-August 2013. Powered by record increase in thermal power, electricity consolidated with 11.7 per cent strong growth, from 4.5 per cent a year ago. In mining, coal production expanded 7.2 per cent, with August recording 13 per cent expansion; though petroleum crude and natural gas remained in the negative zone.

In manufacturing, 11 out of 22 industries at two-digit NIC-levels showed positive growth during August and fourteen over April-August.

INDEX OF INDUSTRIAL PRODUCTION (Y-O-Y % INCREASE)
August
April-August
2013 2014 2013-14 2014-15
Mining -0.9 2.6 -3.6 2.5
Manufacturing -0.2 -1.4 -0.1 1.8
Electricity 7.2 12.9 4.5 11.7
Overall IIP 0.4 0.4 0 2.8
Use-based classification
Basic goods 0.9 9.6 0.2 8.6
Capital goods -2.0 -11.3 0.7 4.3
Intermediate goods 3.8 0.3 2.4 2.5
Consumer goods -0.9 -6.9 -1.6 -4.9
Consumer durables -8.3 -15.5 -11.2 -9.7
Consumer non-durables 5.4 -0.9 6.8 0.9

Industries showing negative growth during April-August included wearing apparel: (-) 8.7 per cent, publishing and printing: (-) 5.8 per cent, office and computing machinery (-) 41.3 per cent, radio, TV, communication equipment: (-) 50.1 per cent, motor vehicles: (-) 3.9 per cent, wearing apparel (-) 8.7 per cent and coke, petroleum refinery: (-) 2.2 per cent. Fourteen industries recording positive growth rates included food products (6.7 per cent), basic metals (13.9 per cent), non-metallic mineral products (7.9 per cent), machinery and equipment (5.6 per cent), transport vehicles (12 per cent) and electrical machinery (21.8 per cent).

Capital goods go deeper in decline
In use-based classification, capital goods index declined 11.3 per cent in August, against 2 per cent erosion in this month a year ago and 3.9 per cent in the preceding month. This is steep deterioration after 14 per cent increase during Q1, which nevertheless helped the sector post 4.3 per cent growth during April-August. Among the other material inputs in project execution, cement production increased 11 per cent and alloy, non-alloy steel 2 per cent cumulatively. Consumer durables index has kept sinking, recording 15.5 per cent decline in August and 9.7 per cent over April-August, both rates indicating degeneration into deeper red. Consumer durables include passenger cars, two-wheelers, gems and jewellery etc.

Consumer non-durables stagnated at year-ago level. Basic goods and intermediate goods improved upon their year-ago feat.


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