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‘Increase aided by pickup in investment demand, part-spurred by a rise in government expenditure’
Growth in industrial activity picked up to a five-month high of 7% in June, driven by an across-the-board acceleration in growth rates including in sectors such as manufacturing, electricity, infrastructure, and capital and consumer goods, according to official data released on Friday.
The Index of Industrial Production registered a growth rate of 7% in June, rising from 3.93% in May. Within this, the manufacturing sector grew 6.9% in June, an increase from 3.66% in May. The primary goods segment within the IIP registered a growth rate of 9.28% in June, up from 5.74% in May. Capital goods witnessed a similar acceleration in growth rates, coming in at 9.62% in June up from 6.92% in the previous month. The infrastructure sector showed strong growth of 8.53% in June, up from 7.42% in May. “This is in tandem with credit growth in the construction sector at around 8% during the last 12 months.” “However, we are slightly concerned with the weakness in consumer non-durables, though this could reverse on the back of normal monsoons and government support aiding rural income as we go ahead,” Mr. Prasanna added. Consumer goods saw growth accelerating to 5.92% in June from 1.57% in May.
Within this, consumer durables witnessed a strong surge, registering a growth rate of 13.1% in June, up from 6.39% in May. Consumer non-durables, however, grew only 0.47% in June, although this reversed the contraction of 2.06% witnessed in the previous month. “The encouraging news is the jump in the production of capital goods and infrastructure and construction goods,” Chandrajit Banerjee, director general of CII said in a note.
Source : https://www.thehindu.com/todays-paper/tp-business/iip-surges-to-five-month-high-of-7/article24661067.ece
