New Delhi, Aug 12 (FN Agency) Factory output in terms of Index of Industrial Production (IIP) grew at 4.2 percent in June 2024 y-o-y basis as against 4 percent in the same month last year but is considerably low from 6.2 percent in the previous month of May, according to official data released by the government on Monday. The growth rates of the three sectors, Mining, Manufacturing and Electricity for the month of June 2024 over June 2023 are 10.3 percent, 2.6 percent and 8.6 percent respectively. Within the manufacturing sector, the growth rate of the top three positive contributors to the growth of IIP for the month of June 2024 are – Manufacture of basic metals at 4.9 percent, Manufacture of electrical equipment at 28.4 percent, and Manufacture of motor vehicles, trailers and semi-trailers at 4.1 percent, the government said.
Looking at the performance in the first quarter (April-June) of current fiscal, the factory output has grown 5.2 percent as against 4.7 percent growth registered in the same quarter of last financial year, the official data revealed. The Manufacturing sector, carrying a weight of over 77 percent in the overall IIP, has grown at 3.8 percent in the April-June period of 2024-25 compared to 5.1 percent in the same period of last financial year, according to data. According to use-based classification the capital goods segment registered a growth of 2.4 percent in June this year as against 2.9 percent in the same month in 2023, the government said in an official statement, adding that the output of consumer durables increased 8.6 percent in the month of June, the output of non-durable consumer goods contracted by 1.4 percent.
According to use-based classification, top three positive contributors to the growth of IIP for the month of June 2024 are – Primary goods, Consumer durables and Infrastructure/Construction goods.
Goods related to infrastructure and construction saw a marginal growth of 4.4 percent in June 2024, the output of primary goods increased by 6.3 percent in June 2024. Commenting on the IIP, Aditi Nayar, Chief Economist, Head of Research and Outreach, ICRA Ltd. said “The IIP growth slightly trailed our forecast (4.5%) led by manufacturing. Notwithstanding the mixed trends in the available high frequency data for July 2024, ICRA anticipates the YoY IIP growth to ease to 2.5-4.5% in that month, amid an adverse base (+6.2% in July 2023). With a slowdown in Government capex amidst the elections and lacklustre rural demand as well, we anticipate a moderation in the GDP growth print for Q1 FY2025.”