IIP in negative zone for second month, contracts 0.7% in August

NEW DELHI: Remaining in the negative zone for the second month, industrial production contracted by 0.7% in August due to slump in manufacturing, mining and capital

NEW DELHI: Remaining in the negative zone for the second month, industrial production contracted by 0.7% in August due to slump in manufacturing, mining and capital goods segments.

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Factory output, measured by movement in Index of Industrial Production (IIP), had slipped to 8-month low of (-) 2.49% (revised) in July on account of declining output in manufacturing and capital goods sectors.

The fall in August is lower than in July.

On a cumulative basis, factory output during April-August contracted by 0.3%, compared with a growth of 4.1% in the same period last fiscal.

The official data released showed that the manufacturing sector, which constitutes over 75% of the IIP index, contracted by 0.3% in August, against 6.6% expansion in the same month previous year.

The capital goods output registered a steep decline of 22.2% during the month, compared to a growth rate of 21.3% in last year. The data revealed that mining activities shrunk by 5.6% in August this year, against a growth of 4.5% in August 2015.

Power generation remained almost flat (0.1%) during the month, compared to an expansion of 5.6% a year ago.