Raising hopes of investment cycle uptick, industrial growth jumped to nine-month high of 5 per cent in February on better performance...
Raising hopes of investment cycle uptick, industrial growth jumped to nine-month high of 5 per cent in February on better performance of manufacturing sector and higher offtake of consumer as well as capital goods.
The manufacturing sector, which constitutes 75 per cent of the index of industrial production, grew by 5.2 per cent in February against a contraction of 3.9 per cent in the same month a year ago, the data released by Central Statistics Office today showed.
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Other sectors which showed marked improvement are capital goods and consumer goods, recording growth rates of 8.8 per cent and 5.2 per cent, respectively.
The factory output had registered a decline of 2 per cent in February 2014.
The industrial output growth in February 2015 is the highest since May 2014 when IIP grew by 5.6 per cent.
The IIP figures, CII President Sumit Mazumder said, are “much above market expectations, point to the industrial recovery firmly taking root and an impending turnaround in the investment cycle”.
The government, he suggested, should continue to undertake the policy reforms to unshackle entrepreneurial activity, reviving investments and accelerating growth.
In the April-February period of 2014-15, IIP grew 2.8 per cent as against contraction of 0.1 per cent in same period of
Meanwhile, the IIP for January has been revised upwards to 2.77 per cent from the provisional estimate of 2.6 per cent
released last month.
Fifteen out of the 22 industry groups in the manufacturing sector have shown positive growth during the month of February
Commenting on the IIP data, FICCI Secretary General A Didar Singh said that it is important that to sustain this growth “interest rates are brought down further for stimulating investments and demand”.
He further said that this positive sentiment and growth should continue for the creation of additional jobs.
During April-February period, the manufacturing sector saw an output growth of 2.2 per cent, compared to a contraction of 0.7 per cent in the year-ago period.
In the April-February period, capital goods output grew by 6 per cent as against a dip of 2.6 per cent.
However during April-February, the output of overall consumer goods contracted by 3.7 per cent compared to a dip of 2.9 per cent in the corresponding period last fiscal.
Mining sector output grew by 2.5 per cent in February, compared to a growth of 2.3 per cent in same month last year.
During April-February period, output grew by 1.5 per cent compared to a contraction of 0.7 per cent year-on-year.
The consumer durables output contracted by 3.4 per cent compared to a decline of 9.8 per cent in the same month last year. In April-February, the output declined by 13.3 per cent compared to a dip of 12.3 per cent in the same period last fiscal.
The consumer non-durable production grew by 10.7 per cent in February compared to a contraction of 2 per cent in same month last year.
The intermediate goods’ production grew by 1.1 per cent in February compared to a growth of 4 per cent in same year ago.
The basic goods output grew by 5 per cent in February compared a growth of 4.5 per cent in same month last year.
Rebound in IIP indicates turn in investment cycle: India Inc
Cheering the rebound in industrial production which grew at nine-month high of 5 per cent in February, India Inc today said the upswing points to the industrial recovery firmly taking root and an impending turnaround in the investment cycle.
“What is heartening to note is that the capital goods sector, which is a guage for investment demand, has shown an improved performance indicating that investment activity is gradually gaining traction due to improved sentiment and a gradual pick up in new business and foreign orders,” said Sumit Mazumder, President of CII.
The factory output, as measured by the Index of Industrial Production (IIP), had declined by 2 per cent in February 2014.
In the April-February period of 2014-15, IIP grew 2.8 per cent as against contraction of 0.1 per cent in same period of previous fiscal, as per the data released by the Central Statistics Office (CSO) today.
Significant uptick in IIP at 5 per cent growth is encouraging and indicates a visible improvement in the business environment, PHD Chamber President Alok Shriram said.
Rebound in the growth of capital goods during the recent months is indicative of a positive turn in the investments cycle, said Shriram.
The effective implementation of the policy environment will not only improve the growth and competitiveness of the industrial sector, but also push economic growth on high road, he added.
Assocham President Rana Kapoor termed the IIP numbers for February as “encouraging”.
“The recovery seems to have stemmed from a rebound in growth seen in the capital goods production, though, the slow growth of the intermediate goods despite the growth in the capital goods production indicates that revival story is not fully complete,” Kapoor said.
The rise in industrial production came on the back of on improved mining and manufacturing activity coupled with larger offtake of capital goods.
“It is important that to sustain this growth interest rates are brought down further for stimulating investments and demand and more steps are taken to improve our business regulatory environment,” said Ficci Secretary General Didar Singh.
Manufacturing output, which constitutes over 75 per cent to the index, grew by 5.2 per cent in February compared to a contraction of 3.9 per cent in the same month year ago.