NEW DELHI: Industrial output growth rate slowed down to 5.8% in September compared to 10.3% in August, a 14-month high. The measure of factory output, indicated by the Index of Industrial Production (IIP), had registered a growth of 3.3% in September 2022. IIP recorded a growth of 6% during April-September 2023, reflecting a fall from 7.1% growth saw during the same period last year. Manufacturing sector, accounting for 77% in IIP, saw a 4.5% growth in September 2023.
Mining recorded a growth of 11.5% year-on-year (YoY), marking the third consecutive month of double-digit YoY growth, while electricity output grew 9.9% YoY. Though the growth rates in all usage-based segments moderated in September 2023, primary goods recorded a growth rate of 8.0%, infrastructure goods grew at 7.5%, capital goods at 7.4%, and intermediate goods at 5.8% YoY.
Growth in infrastructure/construction goods slightly cooled down due to a high base effect from September 2022 (8.2% YoY) and adverse impacts of southwest-monsoon rainfall on construction activity. Government capital expenditure (capex) remained supportive of infrastructure and capital goods, with spending from central government and 24 states reaching Rs 1.71 lakh crore, a substantial growth of 37.8% YoY in September 2023.
Consumer durables and non-durables segments saw slower growth of 1.0% and 2.7% YoY, respectively, in September 2023, as against 5.8% and 9.6% growth recorded the previous month. High-frequency indicators like coal, power demand, steel, and e-way bills demonstrated growth rates ranging from 11%-30% YoY in October 2023.
Sunil Kumar Sinha (senior director & principal economist) & Paras Jasrai, senior analyst at India Ratings and Research, said, “This is lower than Ind-Ra’s expectation of 7%. India Ratings believes this along with a favourable base effect (October 2022: negative 4.1% yoy) may keep IIP growth around 10% yoy in October 2023.”