Industrial Output Sees Modest Recovery In June
India’s industrial output picked up in June as restrictions imposed to curb the second wave of Covid infections eased.
The Index of Industrial Production rose 5.7% in June from the previous month. It had contracted 8.4% in May on a monthly basis, according to revised estimates. Over a year ago, industrial output was higher by 13.6%, data released by the Ministry of Statistics and Programme Implementation on Thursday showed.
Thirty-four economists polled by Bloomberg had forecast 13.8% growth in industrial output in May compared to a year ago.
Among the three key sectors, manufacturing and electricity saw a pick-up in output, while mining activity fell.
Mining output fell 2.3% in June compared to May.
Manufacturing output rose 7.4% month-on-month.
Electricity output rose 4.4% in June month-on-month.
"The strength in manufacturing industrial production shows that the recovery is being led by this sector, as central and state governments have been slow to open up the services sectors, which mostly involve high-contact activities," said Rahul Bajoria, chief India economist at Barclays. "Overall, today’s industrial output data give us confidence that activity levels are holding up, and we remain comfortable with our 9.2% year-on-year growth projection."
Industrial output, as classified by the end-use of goods, indicated a sharp pick-up across capital goods and consumer durables.
Primary goods output was flat month-on-month.
Capital goods output rose 27.1%.
Intermediate goods output rose 2.6% on a monthly basis.
Infrastructure and construction goods output saw a rise of 6.3%.
Consumer durables output rose 33.5% from last month.
Consumer non-durables output rose 2.6% on a month-on-month basis.
"It is encouraging to witness a broad-based recovery in manufacturing with a pickup in textile and capital goods among others along with continuing momentum in the metals and the auto sector," said Suman Chowdhury, chief analytical officer at Acuité Ratings and Research. "Except for consumer non-durables, all the use-based segments have seen a healthy growth year on year."