India’s industrial production growth slowed to 4.8% year-on-year in July 2024, primarily driven by a subdued performance in the manufacturing and mining sectors, according to official figures released on Thursday. The Index of Industrial Production (IIP), a key measure of factory output, was adjusted upward for June 2024, from an earlier estimate of 4.2% to a revised 4.7%.
For July 2024, the IIP showed growth at 4.8%. In the cumulative period from April to July of the current fiscal year, the IIP expanded by 5.2%, a slight improvement over the 5.1% growth seen in the same period of the previous fiscal year.
In contrast, a year earlier in July 2023, the IIP registered a stronger 6.2% growth, as noted by the Ministry of Statistics & Programme Implementation. This deceleration in July 2024 is largely attributable to weaker outputs from critical sectors like mining and manufacturing.
Mining output, which had surged by 10.7% in July 2023, fell to a modest 3.7% growth in July 2024, marking a significant slowdown. Similarly, the manufacturing sector’s output, which had grown by 5.3% in the same month last year, saw its pace decrease to 4.6% in July 2024.
However, power generation provided a silver lining, growing by 7.9% in July 2024, only slightly below the 8% recorded in July of the prior year. This steady growth in the power sector contrasts the sharper declines in other industrial areas.
Looking at the output through a use-based classification lens, capital goods production exhibited a noteworthy acceleration. The segment grew by 12% in July 2024, more than doubling the 5.1% growth seen in July 2023, indicating a recovery in investments related to long-term infrastructure and industrial projects.
On the other hand, the consumer non-durables sector performed poorly, with output contracting by 4.4% in July 2024, in stark contrast to the robust 8.3% growth it experienced in July 2023. The decline reflects weakened consumer demand in the segment.
Meanwhile, production of consumer durable goods rose by 8.2% in July 2024, a sharp reversal from the 3.6% contraction seen a year earlier. The infrastructure and construction goods segment also slowed, registering 4.9% growth in July 2024, down from an impressive 12.6% expansion in July 2023.
This dip reflects a cooling in construction activities, which had been a significant driver of industrial output growth the previous year. Primary goods output saw a moderate increase of 5.9% in July 2024, falling short of the 7.7% growth recorded in July 2023, indicating a general slowdown in the production of essential inputs to various industries.
However, the intermediate goods segment offered a bright spot, with growth rising to 6.8% in July 2024, up from 3.2% in the year-ago period, signaling strength in supply chain activities. Overall, while certain sectors like capital goods and power generation showed resilience, the broader deceleration in industrial production highlights emerging challenges for India’s manufacturing and mining sectors.
