Factory output stands at 6.6% in July 2018; manufacturing sector at 7%

India's industrial production (IIP) or factory output for the month of July 2018 came in at 6.6% which was slightly lower compared to 6.9% recorded in previous month. However, this was higher compared to the level in the month of July 2017. The quick estimates of IIP with base 2011-12 for the month of July 2018 stands at 125.8. 

The cumulative growth for the period April-July 2018 over the corresponding period of the previous year stands at 5.4%.

Under IIP, the Mining, Manufacturing and Electricity sectors for the month of July 2018 stand at 95.8, 127.6 and 162.1 respectively, with the corresponding growth rates of 3.7%, 7.0% and 6.7% as compared to July 2017. The cumulative growth in these three sectors during April-July 2018 over the corresponding period of 2017 has been 5.0%, 5.6% and 5.3% respectively.

In terms of industries, 20 out of the 23 e industry groups in the manufacturing sector have shown positive growth during the month of July 2018 as compared to the corresponding month of the previous year. 

source: tradingeconomics.com

The industry group ‘Manufacture of furniture’ has shown the highest positive growth of 42.7% followed by 30.8% in ‘Manufacture of computer, electronic and optical products’ and 28.4% in ‘Manufacture of tobacco products’. 

On the other hand, the industry group ‘Manufacture of paper and paper products’ and ‘Printing and reproduction of recorded media’ have shown the highest negative growth of (-) 2.7% followed by (-) 0.9% in ‘Manufacture of machinery and equipment n.e.c.’.

Overall manufacturing sector growth was at 7% this month.

As per Use-based classification, the growth rates in July 2018 over July 2017 are 6.9% in Primary goods, 3.0% in Capital goods, 1.2% in Intermediate goods and 8.4% in Infrastructure/ Construction Goods. The Consumer durables and Consumer non-durables have recorded growth of 14.4% and 5.6% respectively.

For July month, Teresa John, Research Analysts (Economists) at Nirmal Bang said, “IIP for July 2018 is likely to come in at 7.5% YoY, up from 7% in the previous month. A low base on account of GST implementation last year is partially responsible for the uptick.”