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Slowdown in Manufacturing
Aug 1, 2017


The output of eight core industries slowed down in June as the total output moved up marginally by 0.4% as against an increase of 4.1% in May 2017. The combined index of eight core industries stands at 121 in June 2017, compared to 120.5 in June 2016. The eight core industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

The slowdown in on the back of a decline in output of coal, refinery products, fertilizer and cement.

The previous low was recorded in November 2015, when the sectors' output had declined by 1.3%. Coal production, petroleum refinery production and cement production declined by 6.7%, 0.2% and 5.8% respectively in June 2017 as compared with the corresponding month of last year. On the other hand, steel production, Natural gas production and Electricity generation increased by 5.8%, 6.4% and 0.7% respectively. During April-June period of the current fiscal, growth of the eight core segments slowed down to 2.4% from 6.9% in the same period last year.

The above data clearly indicates a subdued picture of industrial growth in June 2017. PMI data also highlighted a slowdown in growth across India's manufacturing sector during June 2017. As per the survey report, challenging economic conditions, water shortages and the implementation of the GST reportedly hampered growth.

Nevertheless, growth recovery is expected to accelerate in the second half of 2017. This will be on the back of a resumption of production after GST, normal monsoons and lower lending rates.

Data Source: Ministry of Commerce & Industry

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