Industrial output growth dismal at 2.1 percent

Industrial output growth dismal at 2.1 percent
eKantipur.com, 26-April-2007

The manufacturing production index (MPI), a major indicator of the country's industrial output, recorded a meager growth of 2.1 percent in the first half of the current fiscal year as compared to the same period last year.

The lower than expected growth rate was the upshot of the tumble in production of textile, garment apparel, plastic and metal products, and electrical wire and cables. According to the latest report of Central Bureau of Statistics (CBS), of the 20 sub-sectors listed under the MPI, eight showed declines, while the performance of the rest was also not satisfactory.

The report states that production of vegetable oil and fat, which hold the largest weight of 15.78 in the MPI, went up marginally by 2.5 percent in the review period.

Despite the growth, the increment in production of vegetable ghee -- which alone holds a weight of 10.08 -- was meager at 0.28 percent. The manufacture of vegetable ghee had surged by 9.2 percent in the similar period last fiscal year.

The biggest gainer in the first six months of the current fiscal year was the chemical products sub-sector that boasts of a weight of 10.34 in the MPI.

The report states that production of medicine and soap - listed under chemical products sub-sector -- witnessed a robust growth of 9.65 percent and 10.32 percent respectively in the first six months of the current fiscal year.

Similarly, manufacture of food products and beverage went up by 6.09 and 4.84 percent respectively, in the review period.

Of the major products under food products group, production of sugar and noodles surged by 10.26 percent and 4.94 percent respectively. Under the beverage sub-sector, production of alcohol increased by 5.25 percent, production of beer increased by 4.86 percent and manufacture of soft drinks went up by 4.01 percent.

Among others, production of rice went up by 4.4 percent, production of wheat flour increased by 4.48 percent and manufacture of animal feed witnessed a robust growth of 12.83 percent.

Plagued by the sluggish global demand for readymade apparels and labor related problems, the production of garments continued to decline in the first six months of the current fiscal year.

As per the report, production of garments slumped by 12.5 percent in the review period.

Similarly, production of pashmina products fell by almost eight percent, while manufacture of woolen carpet also slumped by 10.96 percent in the first half. Production of pashmina products and woolen carpets had increased by 2.22 percent and 1.75 percent respectively, in the similar period of last fiscal year.

Among others, production of plastic products declined by three percent and production of electrical wire and cables fell by around three percent.