A worker during the manufacturing of critical components for Indian Space Research Organisation's (ISRO) launches at Godrej Aerospace, in Mumbai.
Credit: PTI Photo
New Delhi: Industrial production witnessed a growth of 3.1 per cent in September as against a contraction of 0.1 per cent recorded in the previous month led by good performance of the manufacturing sector, official data showed on Tuesday.
Manufacturing sector posted a growth of 3.9 per cent year-on-year during the month under review while mining and electricity registered a sluggish expansion of 0.2 per cent and 0.5 per cent, respectively.
The Index of Industrial Production (IIP) witnessed improvement in September, reversing slowing trends of the previous two months.
The improvement was broad-based across consumer, industrial and infrastructure sectors. Consumer durables saw the highest growth at 6.5 per cent in September as production ramped up before the festive season. Consumer non-durables also grew after three months of decline.
"IIP benefited from improving export growth in the month, particularly for petroleum products and chemical products. Infrastructure and construction related goods picked up as well once rains ebbed," said Dharmakirti Joshi, Chief Economist, CRISIL.
“However, the performance of consumption-related segments requires close monitoring given signs of softening urban demand. Infrastructure and construction goods output grew by 3.3 per cent in September (vs 2.2 per cent last month) aiding the overall IIP growth,” said Rajani Sinha, Chief Economist, CareEdge Ratings.
Within the manufacturing sector, top three positive contributors for the month of September 2024 are manufacturing of coke and refined petroleum products (5.3 per cent); manufacturing of basic metals (2.5 per cent), and manufacture of electrical equipment (18.7 per cent).
Industrial growth for the first half of the current fiscal year stood at 4 per cent year-on-year, sharply lower than 6.3 per cent recorded in the corresponding period of the previous year.
For the July-September 2024 period the IIP growth stood at 2.6 per cent, which is the lowest in seven quarters.
“Going ahead, durable and broad-based consumption improvement along with an investment pick-up remain critical for the industrial growth,” Sinha said.
Paras Jasrai, Senior Economic Analyst at India Ratings and Research, said an unfavourable base effect (October 2023: 11.9 per cent) is likely to dent the industrial activity in October 2024.
However, there has been a sustained pick-up in various high frequency indicators owing to the festive rush which would provide some support to the industrial output, he added.
The growth of e-way bill and coal production remained steady at 16.9 per cent and 7.5 per cent, respectively in October. The year-on-year growth of other indicators such as electricity demand and petroleum consumption has improved to a three-month high. All in all, Ind-Ra expects the IIP growth to be around 2 per cent year-on-year in October 2024, Jasrai said.