Industrial output shrinks in May

Things are getting out of control on the macro-economic front, even as the Congress-led Government at the Centre is busy preparing for the 'Trust Vote' in parliament over the controversial Indo-US nuclear deal. While inflation is slowly inching towards the 12% mark, the industrial activity in the country is getting hit badly by six-year high interest rates, soaring raw material costs and a slowdown in overall demand. Government data released on Friday showed that the country's industrial production tumbled in May, growing by just 3.8% as against 10.6% in the same month last year. The figure was way off the mark, as average forecast was for a 6-7% expansion. What's even worse is that April's growth was trimmed to 6.2% from 7%. In the first two months of the current fiscal year, industrial output growth more than halved to 5% from 10.9% in the corresponding period of last year.

Manufacturing sector growth slumped to 3.9% from 11.3% in May 2007. Electricity sector's expansion slowed to just 2% compared to 9.4% in the same month a year earlier. Mining, however turned in an improved performance with a growth of 5.2% as against 3.8% in May last year. Growth in Capital Goods plunged to 2.5% in May from 22.4% in the same month a year earlier. Consumer Goods sector managed to hold its own with an expansion of 7.2% versus 8.7% in May last year. Consumer Durables too did quite well, with a growth of 4.4% as against contraction of 0.7% in the year-ago period. Growth in Consumer Non-durables slid to 8.1% from 12.1% in the corresponding month last year.