Factory output growth cools to 4.8% in January as manufacturing slows: 10 things to know

Industrial production in the country expanded 4.8 per cent in January, slowing from a growth rate of 5.2 per cent in the corresponding period a year ago, official data showed on Monday. Trends in factory output -- also known as industrial production -- are captured using data from the Index of Industrial Production (IIP), which captures activities in key sectors including manufacturing, mining and power to gauge overall industrial productivity over a given period of time.

A slowdown in manufacturing sector activity weighed on the overall factory output slowdown. The space carries the maximum weightage of almost 78 per cent in the IIP index.

The latest data comes days after separate data showed the country's GDP growth slowed to 7.8 per cent from 8.4 per cent in the previous month. The slowdown was on account of a base year revision. That reading was above market expectations. With that, the government revised its annual full-year growth projection to 7.6 per cent from 7.1 per cent, reflecting the reset of the country’s economic data under the new series.

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Here are 10 things to know about the latest industrial production readings:

• For the first 10 months of the current financial year, IIP growth slowed to 4.0 per cent from 4.2 per cent in the corresponding period last year.
• In January, mining sector growth slowed to 4.3 per cent from 4.4 per cent.
• In the manufacturing sector, expansion was recorded at 4.8 per cent, marking a contraction of 100 basis points -- or 1.0 percentage point.
• In power, however, expansion gathered steam, improving to 5.1 per cent in January, from 2.4 per cent a year ago.
• Category-wise data showed that 'primary goods' -- which cover food products, sugar, crude materials, minerals, metals, metals, cotton, wood and logs -- showed growth of 3.1 per cent in January, versus 5.5 per cent a year ago.
• Under 'capital goods', growth dropped sharply to 4.3 per cent from 10.2 per cent. This grouping includes items such as machinery and tools.
• Infrastructure goods production rose 13.7 per cent, higher than a growth rate of 7.3 per cent recorded a year ago.
• The overall December IIP reading underwent a final revision, with growth revised to 8.0 per cent from 7.8 per cent.
• In the 'consumer durables' category, growth in production slowed to 6.3 per cent from 7.1 per cent.
• In the 'consumer non-durables' category, a contraction of 2.7 per cent was recorded in the output, from a 0.1 per cent expansion a year ago.

Source: Ministry of Statistics & Programme Implementation (MoSPI)

Official IIP data is released on the 28th of every month or the next working day if the 28th is a holiday. February's data will be released on March 30.

Here are frequently asked questions (FAQs) on the subject:

What is industrial production? Why is it measured?

Industrial production tracks the output of key sectors like manufacturing and power to gauge the country’s overall factory activity.

How is it measured?

It is measured using the Index of Industrial Production (IIP), which captures trends across core sectors and different categories of goods.

What does IIP data tell?

It shows how the country's industrial sector is performing, tracking production trends in key sectors.

What are primary goods under IIP?

Primary goods include food products, crude materials, minerals, metals, cotton and logs.

What are capital goods?

Capital goods are machinery, tools and equipment used by industries.