Sept industrial output seen up 4.7% yr/yr

ndia's industrial output probably grew 4.7 per cent in September from a year ago, picking up some speed from August's slowest pace in nearly a decade, but analysts said with major economics on the ropes the months ahead would be tough. The median forecast in a poll of 11 analysts was well above the 1.3 per cent annual growth in August but far below July's upwardly revised 7.4 per cent and even further behind last year's double-digit rates. "The momentum of industrial growth has slowed. Manufacturing, especially capital goods, is going to see a drop in output," said N R Bhanumurthy, economist at Institute of Economic Growth. "All the factors - global slowdown, the rising cost of production and declining domestic demand - will have an impact on the industrial production numbers." Industrial output rose 6.8 per cent in September 2007. Policy makers are ratcheting down their expectations for growth in Asia's third-largest economy. Many now say it is likely to slow to 7 per cent in the fiscal year to March 2009, sharply slower than the 9 per cent expansion clocked up in the past three fiscal years. In the June quarter, the economy grew 7.9 per cent from a year earlier, its slowest rate in three-and-a-half years. Reflecting the slowdown, India's manufacturing output expanded at its slowest pace in 14 months in September as domestic demand cooled in the face of seven-year high interest rates ,according to the ABN AMRO Bank purchasing managers survey. The drop in the index (PMI) also showed that a slow down in global demand was starting to bite into exports. Industrial production, which accounts for about a fifth of gross domestic product and is mostly geared to meet domestic demand, rose 8.1 per cent in 2007/08. September's figure may draw some support from 5.1 per cent annual expansion in the infrastructure sector in the month. Infrastructure accounts for nearly a quarter of the country's factory output.