India’s Industrial Output Growth Slows to 4.8% in July Amid Mixed Sector Performances

New Delhi, Sep 13 (KNN) India’s industrial output saw a modest increase of 4.8 per cent in July 2024, marking the second-slowest growth rate of the financial year 2024-25. This follows a slight upward revision of June’s growth rate to 4.7 per cent.

Despite the overall positive growth, several sectors faced slower expansion or contraction, highlighting underlying challenges within the industrial sector.

The Index of Industrial Production (IIP) dipped to a three-month low, with production levels falling by 0.73 per cent from June. This decline reflects a broader slowdown in industrial activity, even as certain segments demonstrated varying performance.

Manufacturing output showed a notable improvement, growing by 4.6 per cent in July, up from 3.2 per cent in June. This sector was the sole broad category to exhibit a sequential increase, though it was relatively modest at 1.6 per cent.

Conversely, mining output experienced a significant deceleration, rising by only 3.7 per cent compared to June’s robust 10.3 per cent increase. Electricity generation also saw a slowdown, with a 7.9 per cent growth in July, down from 8.6 per cent in the previous month.

On an end-use basis, the July data revealed a decline in production growth across four segments compared to June.

However, capital goods led with a substantial growth rate of 12 per cent, a sharp rebound from June’s 3.8 per cent rise. Intermediate goods also performed well, growing by 6.8 per cent, more than double the 3 per cent increase reported in June.

Primary goods growth moderated slightly to 5.9 per cent from 6.3 per cent, while infrastructure and construction goods saw a decrease to 4.9 per cent from 7.1 per cent in June.

Consumer consumption patterns presented a mixed picture. While consumer durables’ output grew by 8.2 per cent from August of the previous year, non-durables production fell sharply by 4.4 per cent in July, following a 1.5 per cent drop in June. This decline in non-durables output was the second-lowest in nine months, and durables production hit a three-month low.

Year-to-date figures reveal that non-durables production has contracted by 1.5 per cent in the first four months of the fiscal year, while durables have surged by 10 per cent.

Notably, three out of six segments—primary goods, infrastructure and construction goods, and consumer durables—reported lower production volumes compared to June.

Overall, while India's industrial output growth in July remains positive, the sector faces a complex landscape with varying performances across different industries and segments. The mixed trends suggest cautious optimism as policymakers and businesses navigate these evolving economic conditions.

(KNN Bureau)