India IIP Growth Slows To 6.7% In July From 8.8% In June As Manufacturing, Mining Weaken

India’s industrial production growth eased in July, with the Index of Industrial Production (IIP) expanding 6.7% year-on-year compared with an upwardly revised 8.8% growth in June, according to data released by the National Statistics Office (NSO). The slowdown reflects weaker momentum across three of the four major sectors.

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The IIP remained at 124.8 in July, compared with 117 in the same month last year. Manufacturing, electricity and gas supply, and water supply recorded growth, while mining and quarrying returned to contraction.

Manufacturing Growth Moderates

Manufacturing output, which has the highest weight in the IIP, grew 7.3% in July, down from 9.5% in June. Of the 23 industry groups tracked at the two-digit level, 19 recorded year-on-year expansion.

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Electrical equipment manufacturing led the growth with a 28.3% increase, followed by motor vehicles, trailers and semi-trailers at 22.2%. Machinery and equipment manufacturing rose 12.1%, while beverages and other transport equipment recorded growth of 21.9% and 22%, respectively.

However, pharmaceuticals contracted 5.6%, while tobacco products declined 12.2%. Chemical products fell 2.7% and wearing apparel dropped 0.6%.

Electricity Leads, Mining Slips

Electricity and gas supply remained the fastest-growing major segment, expanding 8.7%, although this was slower than June’s 11.3% growth. Electricity output increased 9.3%, with non-renewable generation rising 12.5%. Renewable electricity generation grew 3.2%, while gas supply declined 1%.

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Water supply, sewerage and waste management grew 7.4%. Mining and quarrying, however, contracted 0.9% after expanding in June. Non-metallic minerals fell 12.5% and fuel minerals declined 1.3%, although metallic minerals posted strong 24.3% growth.

On a use-based basis, five of six categories recorded slower growth in July. Consumer non-durables contracted 1%, reversing June’s 5.6% expansion.

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