The year-on-year industrial output in July 2020 at -10.4 per cent has improved from the lows of April-May 2020, but is still well below the 4.9 per cent growth of July 2019. Industrial output growth for June 2020 has been revised upwards from -16.6 per cent to -15.7 per cent.
Mining activity contracted 12.97 per cent YoY in July as compared to -19.8 per cent YoY in June 20. This was the slowest pace of contraction since the fallout from the COVID-19 pandemic began in March 2020.
Manufacturing which has the highest weightage (77.6 per cent) in the IIP has seen a further improvement in output growth during July 2020. It improved to -11.14 per cent in July from -17.13 per cent in June and -38.4 per cent in May. This can be directly linked to the easing of restrictions on the operation of manufacturing units. Manufacturing output during April-July 2020 contracted by 33 per cent versus the 3 per cent growth in the same period of 2019.
Electricity output growth too improved in July compared to the preceding month. This can be attributed to higher industrial activity during the month.
Capital goods output fell 22.8 per cent compared to a contraction of 37 per cent last month. It contracted more than 90 per cent in April 2020.
Both infrastructure and construction activity and capital goods production (signs of investment) saw the slowest declines in July in five months. IIP for infrastructure and construction goods declined by 23 per cent in July 2020.
IIP for consumer durables declined by nearly 24 per cent YoY in July. It is the slowest decline in last five months. Production for durables contracted by more than 95 per cent in April 2020 compared to same period last year.