Industrial output contracts 2.3% in March; poor show by manufacturing
Capital goods output dips 8.2%; industrial growth falls to 2.4% in
2008-09.
Our Bureau
New Delhi, May 12 Industrial output in March 2009, compared with the same month
the previous year, contracted by 2.3 per cent.
However, in comparison to February 2009, the Index of Industrial Production
(IIP) improved from 274.2 points to 297.9 points, suggesting a mild recovery,
even though it is early days yet.
There was a sharp spurt in the index reading for March 2008, which accounted
for the poor showing in March 2009. Thus the base effect has been strong.
Data from the Central Statistical Organisation showed on Tuesday that a poor
manufacturing performance, led by the capital goods (output for March 2009
contracted by 8.2 per cent as compared with a 20 per cent growth a year ago)
and consumer non-durables sectors (output down 3.6 per cent against a 1.9 per
cent expansion), added to the downtrend.
The March output numbers compared with a strong 5.5 per cent rise during the
same month in 2008. In the previous month (February 2009), output was revised
to show a 0.7 per cent contraction, as against the provisional estimate of a
1.2 per cent decline.
For the fiscal 2008-09, industrial growth slowed to 2.4 per cent from 8.5 per
cent the previous financial year. With the dip in the industrial output for
2008-09, both the agriculture and services sectors would have to perform much
better to enable GDP growth to come anywhere close to the expectation of 6.5 to
6.7 per cent for the fiscal.
According to the IIP data for March, the contraction was led by a 3.3 per cent
fall in the manufacturing sector's output, which accounts for nearly 80 per
cent of the IIP. The sector, in comparison, grew by 5.7 per cent in March 2008.
The mining sector too performed poorly with the growth rate slipping to 0.4 per
cent during March compared with 4.9 per cent in the same month a year ago.
Electricity generation recorded a growth rate of 6.3 per cent in March, up from
3.7 per cent in the corresponding period a year ago, even though the output
during the year as a whole decelerated to 2.8 per cent from 6.4 per cent in
2007-08.
In case of use-based classification of goods, the capital goods sector -
essentially machinery and equipment used for production by industrial units -
saw a big decline. During 2008-09, the output of capital goods decelerated to 7
per cent from 18 per cent a year ago.
Intermediate goods' production contracted by 4.4 per cent in March, against a
rise of 4.9 per cent during the same month a year ago.
The output of consumer goods declined by 0.8 per cent in the month as compared
to an increase of 0.9 per cent registered in same month last year.
Bucking the trend
Consumer durables, however, bucked the trend and posted a growth rate of 8.3
per cent against a decline of 2 per cent last year.
In terms of two-digit classification of goods, only five out of 17 industries
showed an increase in output in March. Industries showing growth included
beverages, tobacco, chemical products and transport equipment.
Food products, wood and wood products exhibited a negative trend.
The stock markets seemed to have discounted the March IIP data, with the BSE
Sensex gaining 475.04 points, or 4.07 per cent, in volatile trading to close at
12,158.03 on Tuesday.
http://www.thehindubusinessline.com/2009/05/13/stories/2009051352040100.htm
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