Industrial growth slows to 5-month low in March

New Delhi: Industrial production growth moderated to a five-month low of 4.1% in March on back of the West Asia conflict. The growth was 3.9% a year ago and a little slower than the 5.1% growth registered in Feb.

Data released by the National Statistics Office (NSO) Tuesday estimated that manufacturing sector, which accounts for nearly a fourth of the index, grew 4.2% in March, compared with 4% a year ago and 5.9% in Feb.

Within the manufacturing sector, 9 out of 23 industry groups, including apparel, textiles, tobacco, beverages, leather and chemicals saw a decline in the output in March. "The export market was also down, which was partly responsible for the low performance (in these sectors)," Bank of Baroda chief economist Madan Sabnavis said.

Industries manufacturing transport equipment (20.8%), motor vehicles (18.1%), machinery (11.2%) and metal products (8.4%) saw robust growth in March.

Meanwhile, output in the electricity sector (0.8%) also decelerated from 2.3% in Feb, while the mining sector (5.5%) output accelerated in March.

Dipti Deshpande, principal economist, Crisil said the March data captures only a part of the shock due to West Asian conflict, as uncertainty and weak producer sentiment are yet to fully manifest in the production data.

Echoing similar views, CareEdge chief economist Rajani Sinha said the lingering global risks and concerns around supply chain disruptions are expected to pose a headwind for India's overall industrial activity.

"It needs to be seen if there is any reversal in April. The GST impact has not yet been seen in terms of higher demand for FMCG products," said Sabnavis.

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