June industrial output contracts by 2.2%

Showing no signs of recovery of the Indian economy, the June industrial output contracted further by a disappointing 2.2 percent as manufacturing for the same month remained flat.

New Delhi: Dashing hopes of a recovery, industrial production contracted 2.2 percent in June, the second straight monthly drop, on account of a poor show by the manufacturing, mining and power sectors and a decline in production of capital goods.

Factory output measured in terms of the Index of Industrial Production (IIP) had contracted 2 percent in June last year, as per the data released by the Central Statistical Organisation.

Meanwhile, factory output for May was revised downwards to a decline of 2.82 percent from a provisional 1.6 percent dip in production.

During April-June this year, factory output contracted 1.1 percent, down from a decline of 0.2 percent in the same period last fiscal.

The manufacturing sector, which constitutes over 75 percent of the index, contracted 2.2 percent in June compared with a 3.2 percent drop a year earlier. During April-June, the sector saw a decline of 1.2 percent compared with a contraction of 0.8 percent in the period last year.

Mining output declined 4.1 percent in June, compared with a dip of 1.1 percent. In April-June, the sector declined 4.5 percent compared with a contraction of 1.6 percent.

Power generation was flat in June compared with a growth of 8.8 percent in same month in 2012. Power generation in the first quarter grew 3.5 percent compared with an expansion of 6.4 percent.

Output of capital goods contracted 6.6 percent during the month compared with a decline of 27.7 percent a year earlier. During April-June, capital goods production dipped 3.3 percent compared with a production drop of 20.1 percent in same period last year.

Among the 22 industry groups in the manufacturing sector, 13 recorded negative growth in June.

Consumer goods output contracted 2.3 percent in June, compared with expansion of 3.7 percent in the same month last year. Production of these goods declined 2.4 percent in April-June compared with growth of 4 percent.

The decline in output of consumer durables stood at 10.5 percent in June, from a growth of 9.1 percent previously. The segment saw a 12.6 percent decline in output in April-June compared with growth of 8 percent.

Consumer non-durables output expanded 5 percent in June against a contraction of 0.5 percent a year earlier. The segment grew 6.6 percent in April-June compared with growth of 0.6 percent.

Growth in intermediate goods production was 1.1 percent in June compared with 0.9 percent a year ago. For April-June, the segment's expansion was 1.5 percent compared with 0.8 percent.

Basic goods output contracted 1.9 percent in June from a growth of 3.6 percent in June 2012. Production of these goods contracted 0.3 percent in April-June compared with growth of 3.3 percent a year earlier.

PTI