India Industry


Industrial output growth slows to 16-month low

The industrial sector is showing signs of cooling. In September, industrial output grew 4.4% over the same month last year, according to the so-called quick estimate for the index of industrial production. The reading represented the slowest pace of expansion in 16 months and undershot market expectations, which had industrial output rising 7.0%. In August, industrial output added 6.9% (previously reported: +5.6% year-on-year). The deceleration over the previous month was mostly the result of weaker growth in the manufacturing sector, which accounts for nearly three quarters of total industrial output, and that moderated from a 7.5% expansion in August to a 4.5% increase in September. Growth in mining output softened as well (August: +6.6% year-on-year; September: +5.3% yoy), while electricity production improved to a 1.7% expansion (August: +1.0% yoy). On a use-based classification, the monthly slowdown was mostly driven by a deceleration in the production of consumer goods (August: +8.5% yoy; September: +5.2% yoy), in particular of durable consumer goods. Furthermore, the production of capital goods swung from a 2.1% expansion in August to a 4.2% contraction in September. As a result of the weak figure, annual average growth in industrial production moderated from 12.8% in August to 12.4% in September.


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