Factory output rises 3.8% in January 2024

Factory Output: Industrial output growth stood at 3.8 per cent in January, the government data showed on Tuesday. While this signals positive momentum, the figure marks a moderation from the 5.8 per cent growth recorded in January 2023. The backbone of industrial activity, the manufacturing sector, posted a 3.2 per cent growth in January 2024, down from the 4.5 per cent expansion seen in the same month last year. The mining sector emerges as a star performer, boasting a substantial 5.9 per cent growth in January 2024. Power output contributed to the positive narrative registering 5.6 per cent growth in January.

“Growth in India’s industrial production eased to 3.8 per cent in January following an upwardly revised 4.2 per cent growth in the previous month. This can be attributed to the moderation in manufacturing growth to 3.2 per cent in January from 4.5 per cent in December,” Rajani Sinha, Chief Economist, CareEdge said. 

According to her, the consumer durables output jumped notably by 10.9 per cent (from December’s 5.3 per cent growth) supported by a favourable base. However, the contraction in consumer non-durables remains reflective of the weakness in consumption. It is concerning that consumer non-durables performance has remained feeble in the last few months. With CPI inflation moderating, it would be interesting to see if that gets reflected in improved consumption demand in the coming quarters

The retail inflation in February came at 5.09 per cent, against 5.1 per cent seen in January 2024, the data released by the government on Tuesday said. The Consumer Price Index (CPI) inflation in December 2023 was at 5.69 per cent. The CPI retail inflation has been out of RBI’s medium-term target of 4 per cent for almost 53 weeks in a row.