Factory output contracted 2.2 per cent in June from a year earlier, dashing hopes of any recovery. Among the 22 industry groups in the manufacturing sector, 13 recorded negative growth in June.

This is the second straight monthly drop, mainly due to poor showing by the manufacturing, mining and power sectors. Capital goods production also declined during the month under review.

In the same month last year, the index of industrial production (IIP) had declined by 2 per cent.

Inflation worry

The factory output number for May has been further revised downward to a decline of 2.82 per cent against the earlier provisional contraction of 1.6 per cent. On the other hand, retail inflation climbed 9.64 per cent year-on-year in July, official data released on Monday showed.

In April-June 2013, factory output contracted 1.1 per cent, down from a decline of 0.2 per cent in the same period last fiscal.

The manufacturing sector, which accounts for over 75 per cent of the IIP, contracted 2.2 per cent in June compared with a 3.2 per cent drop a year earlier.

During April-June, the sector saw a decline of 1.2 per cent compared with a contraction of 0.8 per cent in the period last year. Mining output declined 4.1 per cent in June, compared with a dip of 1.1 per cent. In April-June, the sector declined 4.5 per cent compared with a contraction of 1.6 per cent.

Power generation was flat in June compared with a growth of 8.8 per cent in same month in 2012. Power generation in the first quarter grew 3.5 per cent compared with an expansion of 6.4 per cent.

Output of capital goods contracted 6.6 per cent during the month compared with a decline of 27.7 per cent a year earlier.

During April-June, capital goods production dipped 3.3 per cent compared with a production drop of 20.1 per cent in same period last year.

srivats.kr@thehindu.co.in

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