Industrial production growth picked up to 7 per cent in June, government data showed on Friday. The cumulative growth for the fiscal first quarter of 2018-19 stood at 5.2 per cent, the Ministry of Statistics said in a statement. Economists surveyed by news agency Reuters had forecast a 5.4 per cent growth in industrial production compared with a revised 3.9 per cent year-on-year increase in May.
Industrial output growth, or factory activity growth, is determined by the Index of Industrial Production (IIP).
“While the use based and broad based IIP growth suggests the recovery is getting broad based and is also supported by growth at 2-digit level, it will be too early to term it as broad based industrial recovery,” said Devendra Kumar Pant, chief economist, India Ratings and Research.
Growth in the manufacturing sector, which constitutes nearly 78 per cent to the index, stood at 6.9 per cent in June. That was sharply higher than 2.8 per cent in the previous month.
“If these rates are sustained in the next 2-3 quarters, we can hope to get to the 5-6 per cent mark for the year which will be a significant recovery,” said CARE Ratings, which had estimated the growth to be at 5.6 per cent.
Factory output in the electricity and mining sectors was at 8.5 per cent and 6.6 per cent respectively.
Nineteen out of the twenty three industry groups in the manufacturing sector showed positive annual growth during the month.
‘Manufacture of computer, electronic and optical products’ registered the highest growth of 44.1 per cent among industry groups. That was followed by a growth of 20.5 per cent in ‘Manufacture of motor vehicles, trailers and semi-trailers’ and 15.6 per cent in ‘Manufacture of other transport equipment’.