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Industry beats forecast

October's industrial growth results raises hopes about a manufacturing-led rebound after its growth fell to a 11-month low in the previous month.

business Updated: Dec 12, 2007 20:28 IST
Gaurav Choudhury

Industrial growth grew by a robust 11.8 per cent in October this year, raising hopes about a manufacturing-led rebound after its growth fell to a 11-month low in the previous month.

The manufacturing sector was the prime driver of the index of industrial production (IIP) in October this year and grew by 13.3 per cent, from a low of 3.8 per cent in the same month a year ago. Analysts, however, said that it would be crucial to watch out for November's growth figures, the month when industrial growth began its blistering upward march last year.

Finance Minister P.Chidambaram called the industrial growth figures “encouraging”, although the cumulative growth during the first seven months was lower at 9.7 per cent, compared with last year’s 10.1 per cent.

“The outlook is encouraging. However, the April-October figure is till slightly lower than last year’s figures for the same period,” Chidambaram said. The finance minister also indicated that it could still take a while for the sector-specific export sops for the textile and leather sectors start yielding positive results. “Let us see. It is only one month's figures,” he said.

Growth in mining and electricity fell to 3.7 per cent and 4.2 per cent respectively in October, down from a 5.9 per cent and 9.7 per cent respectively in the same month last year.

The capital goods sector was among the best performers during October, recording a growth of 20.5 per cent, against a low of 6.5 per cent last year.

On a cumulative basis, output in the consumer durables sector fell by 1.3 per cent, compared with a strong growth of 12.7 per cent during the April to October period last year.

There was, however, a major positive swing in the consumer goods sector growing by 12.5 per cent in October this year, compared with a fall of 2.8 per cent last year. Within the consumer goods sector, consumer durables grew by 9.3 per cent, while the consumer non-durables sector grew 13.9 per cent.

The basic goods sector also grew by a slower 6.2 per cent in October, compared with 10.5 per cent in the corresponding month last year.