The Hindu Business Line : Industrial growth slumps to 3.8% in May

New Delhi, July 11 Industrial output slumped to its lowest level in over six years during May 2008, growing 3.8 per cent on an annual basis as against a healthy 10.6 per cent growth clocked during the corresponding month a year-ago.

Industrial growth during the latest month is sharply lower than April’s revised growth estimate of 6.2 per cent.

Official statistics released by the Government showed that the Index of Industrial Production (IIP) growth was hit as both manufacturing and electricity generation witnessed a slackening in output.

A recovery by the consumer durables sector was negated by a sharp dip in growth in case of the crucial capital goods segment — a pointer to the slowdown in the economy intensifying.

According to the data, manufacturing output grew by 3.9 per cent in May, against 11.3 per cent a year-ago while electricity generation growth slipped to 2 per cent in May from 9.4 per cent.

Mining output, however, bucked the trend, growing by 5.2 per cent in May against 3.8 per cent a year ago.

The cumulative growth in the IIP for the April-May period this fiscal dipped to 5 per cent against 10.9 per cent.

In case of use-based classification, output in the capital goods sector slipped to 2.5 per cent in May from a healthy 22.4 per cent growth witnessed in the same period last year even as consumer durables emerged out of the red to show a 4.4 per cent rise.

Output in the basic goods segment and intermediate goods also slowed down.