India’s Industrial Production Slows In May Despite Growth In Core Output
The index of industrial production rose 1.5 percent in May.
India's factory output in May slowed for the first time in three months, according to data from the Ministry of Statistics and Programme Implementation.
The index of industrial production in May rose 1.7 percent compared to a year ago, slower than the 3.1 percent growth seen in April. Activity in the eight core industries of the country, which form almost half of the index, rose 3.6 percent during May. The actual slowdown was noted in the non-core industries reflecting a higher base effect and adjustment in production in the run-up to the now implemented Goods and Services Tax, according to Abhishek Gupta, economist at Bloomberg Intelligence Economics.
"The effect of the GST on production is likely to be temporary", Gupta had said in a BI Economics research note.
Key Highlights
- Mining activity in May fell 0.9 percent compared to last year, while manufacturing activity rose by 1.2 percent in the same period.
- Electricity generation grew 8.7 percent year-on-year in May.
- Pharmaceuticals and medicinal chemicals industry was the highest growth contributor with a production increase of 24.5 percent over last year.
- Output of digestive enzymes and antacids rose 90 percent, while textile machinery output was up 52 percent
- Manufacturing of motor vehicles, trailers and semi-trailers fell 15.1 percent in May compared to a year ago.
- The electrical equipment industry saw production fall 15 percent, while the manufacturing of fabricated metal products decreased 13.6 percent compared to last year.
The use-based classification of industrial output showed that production of primary goods was up 3.4 percent while capital goods production fell 3.9 percent. The category of infrastructure and construction goods saw a 0.1 percent increase in output.
Consumer durables saw a decline of 4.5 percent in output while consumer non-durables recorded growth of 7.9 percent.