The crucial capital goods segment, which connotes investments, saw contraction deepen at 6.5 per cent, after the 1.6 per cent contraction in the previous month. Production in the category had risen by only 1.2 per cent in the first month of the current financial year, after two months of contraction.
Driven by machinery and heavy transport, capital goods production had been on a solid upward swing till October. But since then, contraction has become the norm for every month, with the exception of two months.
Consumer goods struggle
Consumer durables also contracted, posting a decline of 5.5 per cent after rising by 0.22 per cent in May. Consumer goods production had been slowing for some time, reflective of inventories that have built up in the third quarter of 2018-19 when capacity utilisation also improved. But, with demand tapering off, production has slowed, economists had pointed out.
“On the face of sustained auto sector slowdown and agriculture distress, industrial sluggishness is unlikely to go away soon. All industrial and economic revival hopes hinges on the agriculture sector’s performance, which after July 2019 rainfall has raised some hopes,” said Devendra Kumar Pant, Chief Economist at India Ratings and Research.