The August figure is much better then the July figure wherein factory output contracted -2.2%. As per Use-based classification, the growth rates in July 2013 over July 2012 are 1.7% in Basic goods, 15.6% in Capital goods and 2.4% in Intermediate goods (Statement III).

The Consumer durables and Consumer non-durables have recorded growth of (-) 9.3% and 6.8% respectively, with the overall growth in Consumer goods being (-) 0.9%.

Factory output has been contracting for some months now, as demand in the economy slows, weighed by low consumption and high interest rates.

Economists and analysts believe the situation is unlikely to improve anytime soon, given the slowing consumption, particularly in sectors like automobiles and infrastructure.

However, the sharp growth in the capital goods sector, has boosted the IIP for the month of July, though analysts say that this could be a flash in the pan.

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