Factory output dipped 5.1 per cent in
October, its first fall in more than two years, as manufacturers cut
production, businesses held back investments and consumers trimmed
spending. The Index of Industrial Production, released by the government
on Monday, had shown a robust 11.3 per cent growth in October last.
A worse than expected deceleration in factory output increased fears of an economic slowdown with the 30-share Sensex plunging 2.12 per cent to close below 16,000. Manufacturing, which accounts for almost three-fourths of the total industrial output, dropped 6 per cent compared to a 12.3 per cent growth last October.
Output fell 25.5 per cent for capital goods, indicating a slowdown in investments. What heightened worries was a fall in output of 0.8 per cent for consumer goods and 0.3 per cent for durables. Though industry chambers clamoured for an interest rate cut, the RBI that meets on December 16 for a mid-quarter review may at best build in a dovish forward guidance.
A worse than expected deceleration in factory output increased fears of an economic slowdown with the 30-share Sensex plunging 2.12 per cent to close below 16,000. Manufacturing, which accounts for almost three-fourths of the total industrial output, dropped 6 per cent compared to a 12.3 per cent growth last October.
Output fell 25.5 per cent for capital goods, indicating a slowdown in investments. What heightened worries was a fall in output of 0.8 per cent for consumer goods and 0.3 per cent for durables. Though industry chambers clamoured for an interest rate cut, the RBI that meets on December 16 for a mid-quarter review may at best build in a dovish forward guidance.
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