However, the factory output number has remained in the positive territory for the third month in a row mainly due to a better show by manufacturing, mining and power sectors and higher output of capital goods.
The output, as measured by the Index of Industrial Production, had contracted by 1.8 per cent in June, 2013.
IIP for May was revised to 5 per cent from the provisional estimates of 4.7 per cent released last month, according to data released by the Central Statistics Office (CSO).
During the April-June period of the current fiscal, IIP has recorded a growth of 3.9 per cent, as against contraction of 1 per cent in the first quarter of 2013-14.
It is encouraging to see growth of manufacturing in first quarter, highest since second quarter of 2011-12. Although the growth comes on a negative base but it seems to have bottomed out. This was also reflected in FICCIs latest survey on manufacturing. It is reassuring to see that growth is broad based as 15 out of 22 sectors have shown positive growth during June 2014. Also an encouraging sign is double digit growth in capital goods sector for the first quarter of 2014 however, sectors like consumer goods remain a cause of concern. We are hopeful that the steps taken by the Government so far and measures announced in the budget would help in further revival of the sector, said Sidharth Birla, President, FICCI.
According to the IIP data, output of consumer goods contracted by 10 per cent in June compared to the contraction of 1.5 per cent a year ago. For the April-June quarter, the segment shows a contraction of 3.6 per cent, compared to a decline of 2.1 per cent in the same period of 2013-14.
The consumer durables segment declined by 23.4 per cent in June, as against a dip of 10.1 per cent a year ago. For April- June, it declined by 9.6 per cent as against a dip of 12.7 per cent in the first quarter of last fiscal.
Similarly, the consumer non-durable goods output grew at a meagre rate of 0.1 per cent in June compared to 6.2 per cent in same month last year. During April-June, the segment grew at 0.7 per cent compared to 7.1 per cent in same period last fiscal.
Manufacturing, which constitutes over 75 per cent of the index, grew 1.8 per cent in June, compared to decline in output by 1.7 per cent a year ago. For April-June, the sector grew at 3.1 per cent growth, compared to the contraction of 1.1 per cent in the year-ago period.
Overall, 15 of the 22 industry groups in manufacturing showed positive growth in May.
According to the data, the production of capital goods, a barometer of demand, grew by 23 per cent in June, in sharp contrast to a contraction in output by 6.6 per cent in same month of last year.
For the April-June period, the capital goods output has grown by 13.9 per cent, compared to the contraction of 3.7 per cent in the first quarter of 2013-14.
The mining sector grew by 4.3 per cent in June as against a dip of 4.6 per a year ago. For April-June, the segment grew by 3.2 per cent, compared to decline in production by 4.6 per cent in the year-ago period.
Power generation increased by 15.7 per cent in June as compared to flat output in the same month of 2013. In April-June, power output grew by 11.3 per cent compared to a growth of 3.5 per cent in the year-ago period.
Output of intermediate goods expanded 2.7 per cent in June, compared to 1.3 per cent a year ago. For April-June the output has grown by 3.1 per cent, compared to 1.6 per cent in the first quarter last fiscal.
Basic goods output grew 9 per cent in June, against a dip of 1.9 per cent a year ago. For April-June, the segment has grown by 7.6 per cent compared a contraction of 0.3 per cent in the same period of 2013-14.