The factory output index, as per Quick Estimates from CSO, declined for the second consecutive month in June 2013, after increase in previous four months. Mining and manufacturing yield was in red zone in both the months and electricity generation weakened from 6 per cent rise to a flat in June. Reflecting a starker decay, mining and manufacturing both sank deeper over Q1, and half of last 12 months have ended with y-o-y declines in factory output.
In mining, coal, crude oil and natural gas declined during the month. Investment and consumption have been battered: Capital goods production declined 6.6 per cent over 27.7 per cent drop a year ago, and consumer goods eroded 2.3 per cent, against an unimpressive 3.7 per cent rise in June last year.
As many as 13 of 22 industries at two-digit NIC levels showed decline in June, and 12 during the first three months of the ongoing fiscal.
Industries showing deep decline during the month over the same month in previous year, based on information given in CSO’s press release on IIP, include cigarettes [(-) 25.1 per cent], grinding wheels [(-) 38.3 per cent], copper metal cathode [(-) 72.5 per cent], copper and copper products [(-) 67.9 per cent], boilers [(-) 25.2 per cent], heat exchangers [(-) 59.2 per cent], earthmoving machinery [(-) 23.7 per cent], sugar machinery [(-) 49.9 per cent], plastic machinery including moulding machinery [(-) 25.3 per cent], and gems and jewellery [(-) 32.6 per cent].
For copper and copper products, boilers, sugar machinery, earthmoving machinery and plastic machinery including moulding machinery, this was the third month of y-o-y erosion in production.
Industries achieving noticeable growth included rice (25 per cent), aerated water and soft drinks (28.2 per cent), apparels (33.3 per cent), leather garments (25.5 per cent), di ammonium phosphate (DAP) (164.7 per cent), ethylene (34.1 per cent), polypropylene (32.1 per cent), vitamins (54.7 per cent), PVC pipes and tubes (30 per cent), rubber insulated cable (54.3 per cent), and three-wheelers (including passenger and goods carrier) (35.9 per cent).
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INDEXOF INDUSTRIAL PRODUCTION (Y-O-Y % INCREASE)
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June
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April-June
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|
|
2012
|
2013
|
2012-13
|
2013-14
|
| Mining |
-1.1
|
-4.1
|
-1.6
|
-4.5
|
| Manufacturing |
-3.2
|
-2.2
|
-0.8
|
-1.2
|
| Electricity |
8.8
|
0
|
6.4
|
3.5
|
| Overall IIP |
-2
|
-2.2
|
-0.2
|
-1.1
|
| Use-based classification | ||||
| Basic goods |
3.6
|
-1.9
|
3.3
|
-0.3
|
| Capital goods |
-27.7
|
-6.6
|
-20.1
|
-3.3
|
| Intermediate goods |
0.9
|
1.1
|
0.8
|
1.5
|
| Consumer goods |
3.7
|
-2.3
|
4
|
-2.4
|
| Consumer durables |
9.7
|
-10.4
|
8
|
-12.6
|
| Consumer non-durables |
-0.5
|
5
|
0.6
|
6.6
|
For rubber insulated cables, June was the third consecutive month of noteworthy growth in production. Lack of details which were earlier available in data on DIPP related 268 industries cramp our efforts to delve further into causal factors behind the industry’s performance.
Going by use-based classification, capital goods index, which surrogates project investment, declined for the third month in June, dashing hopes of the sector regaining some strength because of 9 per cent average growth during February and March. Nevertheless, capital goods sector with 3.3 per cent decline during Q1 seems to have fared relatively less badly, when compared with the nadir of 20 per cent the average decline in Q1 in fiscal 2013.
Consumer durables, somewhat akin to capital goods, declined for the third consecutive month with the cumulative decline placed at 12.6 per cent, against 8 per cent rise during Q1 of fiscal 2013. Basic goods IIP declined nominally and intermediate goods index rose anemically. Consumer non-durable rose 6.6 per cent (0.6 per cent).
