Industrial output growth plunges to 17-month low

Industrial output growth plunged to a 17-month low in November, dragged down by a contraction in manufacturing, capital and consumer goods sectors, prompting economists to say that the sharp slowdown during the month could be a blip.

Industrial output growth slipped to 0.5% in November, lower than October’s upwardly revised 8.4% growth and 8.5% expansion recorded in November 2017.

The capital goods sector, which is seen as a gauge of economic activity, declined 3.4% compared with a growth of 5.7% in November 2017. A high base may also have had an impact after the sector posted strong growth as it emerged from the bruising effect of demonetisation and the rollout issues linked to the GST in November 2017.

The CSO’s first advance estimate for 2018-19 GDP showed industry growing robustly, led by manufacturing and construction sectors.

The industrial output data, particularly the capital goods sector, has remained volatile for a significant period, prompting economists to say that the volatility makes it difficult to derive a trend.

The April-November period witnessed 5% growth compared with an expansion of 3.2% for the same period last year, which economists said was a healthy outcome.

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