The Hindu Business Line : Capital goods sector beats downturn

New Delhi, Nov 12 Even as the consumer goods segment recorded a slide in growth, latest CSO estimates show that the capital goods sector managed to buck the trend to post a healthy growth of 18.6 per cent in September in comparison to a 9.5 per cent growth in the corresponding month last year.

The basic goods and intermediate goods segments also stayed in the black, even though growth rates took a beating in comparison to the previous year.

The basic goods segment slipped to 6.7 per cent during September 2007 as against 11.5 per cent in the corresponding month last year while the growth of the intermediate goods decelerated to 9.3 per cent from 13.8 per cent in the same month in the last fiscal.

Output declines

Cumulatively, the output of the consumer durables sector declined to a negative 3.2 per cent in April-September 2007, as compared to a 15.2 per cent growth during the same period the previous fiscal.

The output of the consumer non-durables sector during the same period declined to 8.4 per cent from 10.2 per cent, consumer goods to 5.3 per cent from 11.5 and intermediate goods to 9.5 per cent from 10.9 per cent.

In contrast, the output of the capital goods sector during the first half of the current fiscal improved to 19.6 per cent from 17.5 per cent and basic goods to 9.4 per cent from 8.8 per cent.

In terms of the two-digit classification of industry groups, the ‘transport equipment and parts’ and ‘food product’ segments showed a decline in production by 1.6 per cent and 1.5 per cent respectively during September 2007.

Positive growth

The remaining 15 out of a total of 17 industry groups showed positive growth led by a 72.1 per cent growth recorded by the ‘wood and wood products; furniture and fixtures’ segment.

Responding to the numbers, industry chamber CII said the sectors showing a downturn in output were under stress due to high interest rates, while the appreciation of the Rupee has also made imports cheaper and thereby contributed to stock pile-up for domestic producers, leading to a lagged impact on production.