- The slowdown has gripped most sectors except intermediate goods, which grew at 12.4% in June
- Construction activity indicators, too, slackened, with contraction in cement production and slowdown in finished steel consumption in June
India’s factory output growth slipped to a four-month low of 2% in June, signalling a broad-based demand slowdown and further signs of stress in the economy.
Data released by the National Statistical Office (NSO) on Friday showed manufacturing and mining sectors tottering below the 2% level. Electricity, however, grew at a robust pace of 8.2% due to rising summer demand.
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Analysis of the user-based sectors showed that the slowdown in the economy has gripped most sectors, except intermediate goods, which grew at 12.4% in June. Capital goods, infrastructure goods and consumer durables all contracted in June, while primary goods almost remained flat, growing at a feeble 0.5%.
Only eight out of the 23 industry groups in the manufacturing sector showed growth in June.
Madan Sabnavis, chief economist, CARE Ratings, said the high base effect in the coming months is set to statistically pull down IIP growth further. “Hence, for the full year, it looks unlikely that IIP can go beyond the 4-5% range, unless there is a recovery in the second half,” he added.
Source: Livemint
