India's July industrial output growth slows to 6.7% y/y as mining contracts

New Delhi, Aug 28: India's industrial output growth decelerated to 6.7% year-on-year in July, according to data released on Friday. Mining activity contracted, contributing to slowdowns in manufacturing and electricity output generation. Economists surveyed by Reuters had anticipated a slower growth rate of 6% in July, down from a revised 8.8% in the previous month.

The government had previously transitioned to using producer prices instead of wholesale prices for calculating factory output. In July, manufacturing output expanded by 7.3% year-on-year, up from a revised 9.5% growth in June. Electricity generation saw an increase of 8.7% year-on-year, contrasting with a revised 11.3% rise in the prior month.

However, mining activity contracted by 0.9% year-on-year, down from a revised 1.6% growth in June. Consumer durables, encompassing cars and phones, saw a growth of 10.5% year-on-year, up from a revised 10.3% increase in May. Conversely, consumer non-durables, including food items and toiletries, experienced a decline of 1% year-on-year, falling short of the revised 5.6% rise in the previous month.

Capital goods output expanded by 16.1% year-on-year, a marked improvement from the revised 17.9% growth in June. Overall, industrial output from April to July grew by 6.3%, compared to a 4% increase a year earlier.