Industrial output falls to 8.5% in Oct

Industrial production growth slowed down to 8.5 per cent in October 2005, compared with 10.6 per cent during the corresponding month last year. The slowdown was attributed to poor performance in the mining and manufacturing sector.

While mining output fell by 1.8 per cent during October this year against growth of 6.2 per cent in October 2004, manufacturing production grew but at a slower rate of 9.6 per cent during the month compared with 11.9 per cent growth in October 2004.

Manufacturing sector was pulled down by the slowdown in intermediate and consumer goods. Intermediate goods showed growth of 1.6 per cent, compared with 7.9 per cent during October last year. Growth rate for the consumer goods segment at 11.8 per cent was lower than 15.9 per cent during October last year.

The electricity sector showed a better growth rate of 7.4 per cent during October 2005, compared with 3.5 per cent in October 2004, according to the Index of Industrial Production data released by the Central Statistical Organisation.

"It needs to be noted here is that the (IIP) base was very high for the corresponding period last year and it is difficult to sustain such high growth levels," said D K Joshi, senior economist, Crisil. He added that even though the growth rate was lower, it was healthy.

The cumulative growth in industrial production for April-October, 2005 was 8.4 per cent. Mining grew by only 0.7 per cent. Electricity and manufacturing witnessed 5.2 per cent growth during this period.

Other manufacturing industries witnessed the highest growth of 39.2 per cent followed by 21.6 per cent in beverages, tobacco and related products and 16 per cent in textile products (including wearing apparel) as well as in basic metal and alloy industries.

The industry group food products declined 7.7 per cent followed by wool, silk and manmade fibre textile (5.7 per cent) and wood and wood product, furniture and fixtures (5.2 per cent).