India’s Industrial Output Growth Accelerates To 8% In August, Second-Highest In Over Two Years

New Delhi, Sep 29 (KNN) India’s industrial production growth accelerated to 8 per cent in August, its second-highest expansion in more than two years, supported by stronger manufacturing and electricity output, according to data released by the National Statistical Office (NSO).

August’s growth was the highest in 29 months after the 8.8 per cent expansion recorded in June. July’s industrial output growth was also revised upwards to 7.4 per cent from 6.7 per cent earlier.

Manufacturing Growth Accelerates To 9 Per Cent

Manufacturing output, which accounts for around 76 per cent of the Index of Industrial Production (IIP), grew 9 per cent in August, up from a revised 8.2 per cent in July. This marked the third consecutive month of growth above 8 per cent, reported Business Standard.

Of the 23 manufacturing industry groups, 18 recorded growth. Electrical equipment led with 30.9 per cent, followed by other transport equipment at 25.3 per cent and motor vehicles, trailers and semi-trailers at 25.2 per cent.

Electricity Output Records Strong Growth

Electrical and gas supply output rose 12.3 per cent, its strongest growth since May 2024, while water supply, sewerage and waste management growth moderated to 6.3 per cent.

Mining and quarrying, however, contracted 5.6 per cent, compared with a 0.9 per cent decline in July, mainly due to declines in non-metallic and fuel minerals.

Capital Goods, Intermediate Goods Support Growth

Capital goods output increased 16.9 per cent in August, although growth moderated from 19 per cent in July. Intermediate goods growth accelerated to 13.7 per cent from 10.4 per cent.

Infrastructure and construction goods growth slowed to 6.4 per cent, while consumer durables grew 11.1 per cent. Consumer non-durables returned to growth at 2.1 per cent after contracting 0.8 per cent in July.

Base Effect Supports Manufacturing Growth

Rahul Agrawal, principal economist at ICRA, attributed part of the manufacturing growth to a favourable base effect linked to inventory adjustments ahead of last year’s GST rate changes.

Madan Sabnavis, chief economist at Bank of Baroda, said higher prices and weak purchasing power continued to weigh on demand and production, while broad-based industrial credit growth was supporting the sector’s recovery.

Cumulatively, industrial output grew 6.7 per cent during April-August, compared with 4.2 per cent in the corresponding period last year.

(KNN Bureau)