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India’s Factory Output Holds at 4% in September as Manufacturing Offsets Mining Weakness

A soft first half of the fiscal year leaves questions about the durability of the industrial recovery.

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File Photo: IANS

Overview

  • Official NSO data show September IIP growth at 4% versus 4.1% in August, with manufacturing up 4.8%, mining down 0.4% and electricity up 3.1%.
  • Within manufacturing, 13 of 23 industry groups expanded, led by basic metals at 12.3%, electrical equipment at 28.7% and motor vehicles at 14.6%.
  • Use-based data point to strength in infrastructure and consumer demand, with construction goods up 10.5% and consumer durables up 10.2% year on year.
  • Analysts attribute part of September’s support to inventory build and demand linked to the Sept. 22 GST rate rationalisation and the festive season.
  • The core sector slowed to 3% growth in September from 6.5% in August, and April–September IIP rose 3%, the weakest first-half pace in at least five years, even as some economists expect Q2 GDP at 6.5%–7%.