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Low industrial growth in May
13 July 2010: Industrial production registered a Y-O-Y growth of 11.5 per cent in May 2010 — the lowest in seven months and below the 16.5 per cent for April 2010.
And given the base effect of high growth rates from June 2009, a further moderation in the coming months is not ruled out. Even the 11.5 per cent for May was below the street expectation of 15.5per cent.
All the three major constituents of the official Index of Industrial Production (IIP) recorded lower year-on-year increases in May relative to the previous month — manufacturing (12.3 per cent versus 17.9), mining (8.7 versus 11.7) and electricity (6.4 versus 6.9).
The overall industrial growth for the first two months of the current fiscal works out to 14 per cent against 1.6 per cent during April-May 2009-10. The corresponding figures stood at 15.1 per cent (1.1 per cent) for manufacturing, 10.2 per cent (3.4) for mining and 6.6 per cent (4.8) for electricity.
Within manufacturing, the capital goods sub-sector saw the biggest dip in growth from a heady 69.9 per cent in April to 34.3 per cent in May. The latter was still way above the minus 3.6 per cent for May 2009. The consumer durables growth, too, slowed down from 32.8 per cent in April to 23.7 per cent in May (13.2 per cent in May 2009).
Among other sub-sectors, production of basic goods rose 7.9 per cent year-on-year in May (against 3.8 per cent for the same month of last fiscal), of intermediate goods rose to 10.2 per cent (6.6 per cent) and consumer non-durables 2.4 per cent (minus 5.5 per cent).
During April-May 2010-11, the cumulative annual growth rate for capital goods was 50.9 per cent (minus 4.7 per cent for the first two months of last fiscal).
Source: Hindu Business Line