Factory output rises 4.2% in April, fuelled by mining and manufacturing.
ECONOMY & POLICY

Factory output rises 4.2% in April, fuelled by mining and manufacturing.

India's industrial production growth in April experienced an increase to 4.2% compared to 1.7% the previous year, driven by a rise in manufacturing and mining.

However, the growth in factory output was weaker compared to April 2022, when it reached 6.7%.

In the same period, infrastructure goods showed a growth of 12.8%, which was higher than the 4% expansion recorded the previous year. On the other hand, primary goods registered a growth of 1.9% compared to 10.3% a year ago.

In April 2023, power generation witnessed a decline of 1.1% compared to a growth of 11.8% in the previous year. Mining output, however, increased by 5.1% during the month under review, surpassing the growth rate of 8.4% from a year ago.

Rajani Sinha, Chief Economist at CareEdge, stated, "The industrial output surprised on the upside with a 4.2% growth in April, rebounding from subdued growth in the previous month. The improvement in the manufacturing sector and robust growth in the construction sector are encouraging. However, the continued weakness in external demand remains concerning, as reflected in the muted performance of export-intensive sectors such as textiles, apparel, leather, and related products."

In April, the output of intermediate goods grew by 0.8% compared to a growth rate of 7.1% during the same period last year.

Economists highlighted that the government's capital expenditure (capex) spending appeared to have supported infrastructure output. According to an HDFC report, the accounts of major state governments showed that they began incurring infrastructure expenditure in April 23, while government spending remained unchanged.

"The capex spending by states could have supported double-digit growth in the infrastructure and construction segment observed in April. Further, the output of capital goods also grew at a healthy pace of 6.2% in April-23," stated the report.

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India's industrial production growth in April experienced an increase to 4.2% compared to 1.7% the previous year, driven by a rise in manufacturing and mining. However, the growth in factory output was weaker compared to April 2022, when it reached 6.7%. In the same period, infrastructure goods showed a growth of 12.8%, which was higher than the 4% expansion recorded the previous year. On the other hand, primary goods registered a growth of 1.9% compared to 10.3% a year ago. In April 2023, power generation witnessed a decline of 1.1% compared to a growth of 11.8% in the previous year. Mining output, however, increased by 5.1% during the month under review, surpassing the growth rate of 8.4% from a year ago. Rajani Sinha, Chief Economist at CareEdge, stated, The industrial output surprised on the upside with a 4.2% growth in April, rebounding from subdued growth in the previous month. The improvement in the manufacturing sector and robust growth in the construction sector are encouraging. However, the continued weakness in external demand remains concerning, as reflected in the muted performance of export-intensive sectors such as textiles, apparel, leather, and related products. In April, the output of intermediate goods grew by 0.8% compared to a growth rate of 7.1% during the same period last year. Economists highlighted that the government's capital expenditure (capex) spending appeared to have supported infrastructure output. According to an HDFC report, the accounts of major state governments showed that they began incurring infrastructure expenditure in April 23, while government spending remained unchanged. The capex spending by states could have supported double-digit growth in the infrastructure and construction segment observed in April. Further, the output of capital goods also grew at a healthy pace of 6.2% in April-23, stated the report.

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