A sharp de-growth of 5.1% in October IIP data can be termed as confirmation of slowdown in the Indian economy marred by steep interest rates and dismal growth in factory output, plunging even below its 28-month low.

Moreover, the slowdown in the economy led by weaker industrial output can be further gauged from the declining trend in the IIP figures during the earlier months. While the IIP figures for August 2011 stood at 3.6%, September industrial output moved at a snail’s pace by recording subdued 2% growth.

industry1 thumb India’s September IIP data logs 1.9% growth !

To add to the woes, the factory output actually shrunk by 5.1% in the month of October to mark pessimistic sentiment in production of goods in various different sectors, except electricity which sustained in positive.

While manufacturing sector, which contributes almost two-thirds of the overall IIP index, declined by 6% in October; the mining sector and capital goods output contracted by 7.2% and 25.5% respectively. Decline in production of capital goods was the most unpleasant surprise, as the index logged a steep downfall from 6.8% contraction in the previous month.

On the other hand, production of intermediate goods logged de-growth of 4.7% during October; whereas non-durables consumer goods output remained static at -1.3% during the month under review. On a positive note, electricity production witnessed a strong 5.6% growth in October, as against a robust 9% growth in September 2010.

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2 Responses to India’s October IIP de-grows by 5.1% !

  1. […] has estimated a growth of 6.9% for FY12, mainly due to weakening industrial growth.For instance, India’s October IIP data registered a sharp de-growth of 5.1%, marred by steep interest rates and dismal growth in factory output. Prior to that, […]

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