Industrial production output shrink by 4.3% in September

The latest index of industrial production (IIP) estimates from the NSO show that output shrank by 4.3% in September. All three component sectors in the index – manufacturing, mining and electricity shows contractions.  Also, five of the six categories on the IIP’s use-based classification of goods registered declines, with only intermediate goods bucking the trend. This is the first time after November 2012 that all three broad-based sectors have contracted and the lowest monthly growth in the 2011-12 base year series. Within the Index, the capital goods sector saw a contraction of 20.7%, compared with shrinkage of 21% in August. The mining sector contracted by 8.5%, compared with an anaemic growth of 0.1% in August. The manufacturing sector contracted 3.9% in September, compared with a contraction of 1.2% in the previous month. The electricity sector, too, saw a continued contraction in September, shrinking 2.6%, compared with a contraction of 0.9% in August. The consumer durables sector continued to shrink in September, by 9.9%, compared with a contraction of 9.1% in August. The consumer non-durables sector contracted by 0.4% compared with a growth of 4.1% over the same period. CARE Ratings said that in order to attain 4% growth for FY20, industrial output would need to grow at an average 6-6.5% in the second half of the year.