Dashing hopes of a bounce back in the context of a low year-ago base, factory output as measured by index of industrial production (IIP) declined 2.1 per cent in November, deepening from 1.6 per cent in October. What is worse, the decline came even as electricity, the basic infrastructure, fared better with 6.3 per cent increase against 1.3 per cent in the preceding month. Following the first two months ending with an average decline of around 1.8 per cent, Q3 is unlikely to match the expansion rate of 1.7 per cent in Q2. The factory sector had ended Q1 with 1 per cent decline in output. With four months of first eight months ending with y-o-y drops, the industry has proved a weak spot in the economy so far in the current fiscal.
Indicating that the factory sector is beset with chronic serious ailments, heavyweight manufacturing declined 3.5 per cent in November, twice the rate of 1.8 per cent in October; wilting under five months of y-o-y drops in production, the segment landed with 0.6 per cent erosion over April-November, after an insipid 0.9 per cent rise in the corresponding period of 2012-13.
The output index for mining that provides fuel to thermal power and minerals to industry was up 1 per cent, against 3.2 per cent decline in October; but this was only the second month of increase in the first eight months of the ongoing fiscal, which led to 2.2 per cent (1.8 per cent) decline cumulatively. The IIP at the aggregate level showed 0.2 per cent decline during April-November, even as the electricity generation speeded from 4.4 per cent to 5.4 per cent.
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Ten out of 22 major manufacturing industries recorded decline during the month, and 11 recorded cumulative decline. Radio, TV and communication equipment ended with 25 per cent cumulative decline; furniture, gems and jewellery etc. and office, accounting machines with 17 per cent decline; and motor vehicles with 7 per cent decline, even as wearing apparel and dressing recorded 32 per cent cumulative rise; electrical machinery and apparatus etc. 26 per cent increase; and chemicals and chemical products 10 per cent increase.
Petroleum refinery products, cement and alloy-non-alloy steel expanded in the 2-4 per cent range. Some of the important products showing high negative growth during November included HR sheets [(-) 63.2%], molasses [(-) 61.4%], sugar (including sugar cubes) [(-) 56.3%], boilers [(-) 47.0%], aluminium conductors [(-) 45.4%], telephone instruments (including mobile phones and accessories) [(-) 44.6%], earthmoving machinery [(-) 44.1%], gems and jewellery [(-) 40.4%], computers [(-) 35.3%], sugar machinery [(-) 31.6%] and polyester chips [(-) 28.0%].
In mining, coal production expanded 1.5 per cent, petroleum crude oil declined 0.9 per cent, and natural gas 15.6 per cent. In electricity, hydropower expanded 19 per cent, thermal power 3 per cent, and power import from Bhutan 16 per cent, while nuclear power broadly remained unchanged.
Among the use-based classification, capital goods index declined nominally and consumer durables, somewhat akin to investment goods, has dropped 13 per cent during April-November, while consumer non-durables increased 6 per cent. In fact, the production index for consumer durables has recorded declines consistently during the past 12 months ended November 2013, whereas barring a nominal decline in December last, consumer non-durables have remained in the positive zone. Basic goods index stagnated at year-ago level and intermediate goods index rose 3 per cent during April-November.
Lack of details which were earlier available in data on DIPP related 268 industries cramp our efforts to delve further into causal factors behind the industry performance.
