Industrial growth slows to 6.7% in September as manufacturing eases, mining contracts

Manufacturing loses pace Manufacturing, which accounts for about 76% of the Index of Industrial Production (IIP), expanded 7.6% in September, against 8.6% in August. Seventeen of the sector’s 23 industry groups recorded growth. Motor vehicles, electrical equipment, and rubber and plastics products were the three largest positive contributors within manufacturing, the ministry said. Their output rose 19%, 33.9% and 19.9%, respectively.

Auto components, passenger cars and commercial vehicles supported vehicle production. Electrical equipment growth was helped by switching and circuit-protection equipment, while plastic sheets and tyres were among the products supporting rubber and plastics output. The gains were uneven across industries. Pharmaceutical production fell 8.9%, wearing apparel declined 5.2% and chemicals contracted 0.6%.

Textiles, meanwhile, recorded growth of 17.4%, contrasting with the decline in garment production. 4% in September. While still in double digits, growth slowed from 15.9% in August. Intermediate goods production expanded 12.2%, compared with 14.2% a month earlier, while infrastructure and construction goods grew 7.2%, easing from 8%. Intermediate goods, primary goods and capital goods were the largest contributors to overall industrial growth under the use-based classification, the ministry said.

Consumer goods presented a mixed picture. Consumer durables output rose 6%, down from 10.5% in August. Consumer non-durables returned to growth, expanding 1.4% after a 1.1% contraction in the preceding month. The divergence shows that the improvement in industrial production was not uniform across consumer categories. The figures measure factory output and do not directly establish how much households spent during the month.

Mining remains a drag Mining and quarrying output declined 6.2%, following a 4.6% fall in August. Within the sector, non-metallic minerals production contracted 29.2%, even as metallic minerals and fuel minerals recorded increases. Mining had expanded 15.7% in September last year, setting a relatively high comparison base. Its latest decline contrasted with manufacturing and electricity and gas supply, both of which grew faster than a year earlier.

Electricity and gas supply provided support, growing 11.2%, although this was below August’s 12.3% expansion. Electricity generation increased 12.6%, while gas supply fell 6.7%. Water supply, sewerage and waste management output grew 5.8%. 8%, compared with 4.4% in the corresponding period last year. Manufacturing grew 7.5% and electricity and gas supply expanded 9.7%, while mining contracted 2.4%.

Capital goods production rose 15.1% over the six-month period, while consumer non-durables grew just 0.8%, underscoring the difference in growth across investment-linked and everyday consumption categories. The September figures are quick estimates under the IIP series with 2022-23 as the base year and remain subject to revision. The ministry will release October’s industrial production data on November 30.