Industrial production growth slows to 3.8% in December 2023: Govt data

New Delhi: India's industrial production growth slowed to 3.8 per cent in December 2023, mainly due to poor performance of mining and power generation segments, according to official data released on Monday.

The factory output growth measured in terms of the Index of Industrial Production (IIP) was at 5.1 per cent in December 2022.

In November last year, IIP growth stood at 2.4 per cent.

During April-December period of this fiscal, IIP growth touched 6.1 per cent, up from 5.5 per cent in the corresponding period a year ago.

"India's Index of Industrial Production grows by 3.8 per cent in December 2023," Ministry of Statistics & Programme Implementation said in a release.

As per the latest data, the manufacturing sector's output growth accelerated to 3.9 per cent in December 2023 as against 3.6 per cent a year ago.

However, the power generation growth slowed to 1.2 per cent in December 2023 from 10.4 per cent growth in the year-ago period.

The mining output growth also declined to 5.1 per cent in the month under review from 10.1 per cent in the same period a year ago.

Aditi Nayar, Chief Economist at rating agency ICRA, said that in contrast to the slowdown in the core sector growth, the year-on-year growth in IIP rose to 3.8 per cent in December 2023 from 2.4 per cent in November 2023, led by an improvement in the performance of manufacturing sector.

"In terms of the use-based categories, only primary goods reported a sequential moderation in December 2023, with all five other categories reporting an improvement," she said.

With the available high frequency data for January 2024 appearing promising, Nayar said, "we anticipate a modest rise in the IIP growth to 4-6 per cent in that month."

As per use-based classification, the capital goods segment growth decelerated to 3.2 per cent in December 2023 compared to a growth of 7.8 per cent in the year-ago period.

In December last year, consumer durables output expanded 4.8 per cent. It had contracted 11.2 per cent in December 2022.

Consumer non-durable goods output slowed to 2.1 per cent compared to 7.9 per cent expansion in December 2022.

According to the data, infrastructure/construction goods too reported a deceleration at 4.1 per cent in December 2023 compared to 11 per cent expansion in the same period a year ago.

The data also showed that the output of primary goods logged 4.6 per cent growth in December last year, down from 8.5 per cent in the year-ago period.

The expansion in intermediate goods segment was 3.4 per cent in the latest month under review, higher than 1.5 per cent recorded in the same period a year ago.