Factory output's slower March doesn't dampen annual momentum
NEW DELHI : India’s factory output slowed to 4.9% in March after rising to a four-month high of 5.6% in the month before, hitting the brakes on an otherwise good year. Industrial production expanded 5.8% during FY 2023-24, higher than the 5.2% expansion reported for the year prior, show data released on Friday. But the March numbers fell short of expectations.
Economists polled by Reuters had forecast industrial output in March to grow at 5.1%. If it’s any consolation, industrial output in March 2023 had grown at a mere 1.9%. Since the beginning of FY24, though, India’s industrial output gathered momentum, racing to 10.9% and 11.9% growth in August and October, respectively, driven by higher mining output and festive demand for manufactured items and increased electricity generation.
Industrial output growth slowed to 2.5% in November but has since recovered. Manufacturing output in March rose 5.2% year-on-year, faster than the 1.5% recorded in the same month of the previous year. Mining activity, though, increased at a slower pace of 1.2% as compared with the 6.8% rise in March last year.
But consumer durables production, which highlights consumer sentiment, grew by 9.5% during the month after contracting 8% in March 2023. "Consumer goods have shown a revival buttressing the feeling of consumption picking up towards the year-end. Both durable and non-durables have done well," Bank of Baroda's chief economist Madan Sabnavis said in a research note.
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