New Delhi: A slowdown in the manufacturing sector pulled down India’s industrial growth in June to 5.4% from 8.9% a year ago, but consumer sector nursed its way back to health growing 10%.
Growth in manufacturing sector, which accounts for over two-third of the Index of Industrial Production, fell drastically to 5.9% from 9.7% a year ago.
Manufacturing exhibited a similar trend in the first quarter as well, growing by a poor 5.6% compared with 11.1% last year.
The only silver lining was that consumer durables growth gathered momentum in June registering a growth of 3.5% against a negative growth of 3.6% last year, pushing up the overall consumer sector growth to 10%.
Electricity sector growth fell to 2.6% against 6.8% a year ago, while mining sector bounced back to post 2.9% growth compared with 1.5%.
Crude production slips
Among infrastructure industries, crude production fell by 0.2% in the first quarter against 0.7% a year ago. In the month of June, the fall was sharper at 4.7 per cent against 1.8 per cent in the same month in 2007.
“Crude production is supply side problem. It is not suggestive of any long term trend,” HDFC Chief Economist Abheek Barua said.
Among industries, consumer non-durables grew by a healthy 12.2 per cent in June against 6.3 percent a year ago.
“Growth in the consumer non-durables sector, which mainly comprises clothing and food, may be because of good monsoon,” Barua added.
However, capital goods growth, which is crucial for future industrial growth, declined substantially to 5.6% from 23.1% in June and 6.5% from 19.1% in the first quarter.
Analysts said capital goods production was exceptionally high last year. The slowdown this time was also attributed to low investment activity.
Among broader definition of industry, electricity generation grew by 2.6% in June against 6.8% a year ago. In the first quarter, electricity generation grew by 2% from 8.3%.
Mining output growth, however, was up by 2.9% in June from 1.5% a year ago and 4.7% in the first quarter against 2.7% in 2008-09.