Industry at stall-speed

Given the manufacturing PMI is just about keeping up (it is 52 right now while service PMI is at break-even levels), it’s hardly surprising that September IIP is down to a two-year low of 1.9%. Industrial growth, which has slowed down from 8.6% in the third quarter of 2010-11 to 7.9% in the fourth and 7% in the first quarter of 2011-12, is now 3.1% for the most recent quarter. And the major reason for the fall has been the investment slump, which has shrunk the production of capital goods by 5.9% in the second quarter, a steep fall from the 17% growth registered in the first quarter of the year.

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