Growth in industrial production contracts 1.9 % in February

Manufacturing sector pulls down growth

Bellying hopes of a recovery, industrial production slipped back into negative territory in February, according to official data released on Friday. Continuing lacklustre manufacturing performance, especially in capital goods, dragged industrial production to negative growth of 1.9 percent, the data released shows. In February 2013, the Index of Industrial Production (IIP) had grown modestly by 0.6 percent.

For January, the Central Statistics Office (CSO) revised the data for factory output upward to positive growth of 0.8 percent from the provisional estimate of 0.1 percent.

Factory output as measured by the IIP had started to decline in October 2013, when it had contracted 1.2 percent. The trend continued till December.

Cumulative growth in the 11-month period April 2013 - February 2014 stood at (-) 0.1 percent against positive growth of 0.9 percent in the corresponding period of the previous year, according to the data released. It is, therefore, unlikely that 2013-14 will end with positive industrial growth.

It is very unlikely that there will be positive growth in March, said Care Ratings, as the base year effect is quite sharp. “With a peak index in March 2013, the month-on-month growth in March 2014 will have to be 12.4 percent for even zero growth,” said Care Ratings Chief Economist Madan Sabnavis, “Therefore, overall manufacturing and industrial growth will be negative in March as also for the entire year”.

The weak industrial output performance continues mainly on account of poor consumer demand. High inflation and unaffordable interest rates on EMIs have dented the consumer sentiment.

Manufacturing, which constitutes over three-fourth of the index, shrunk 3.7 percent in February. It had grown 2.1 percent in the same month in the previous year. During April 2013 – February 2014, the sector's output contracted 0.7 percent.

Production of capital goods shrank 17.4 percent, in sharp contrast to an expansion of 9.1 per cent in the same month in 2012. The segment declined 2.5 percent in April-February over a contraction of 7.7 per cent in the same 11-month period in the previous year.

Overall, 13 of the 22 industry groups in manufacturing showed negative growth in February as compared to the corresponding month of 2012.

The industry group ‘Radio, TV and communication equipment and apparatus’ showed the steepest negative growth of (-) 34.1 percent, followed by (-) 24.6 percent in ‘Electrical machinery and apparatus’ and (-) 21.3 percent in ‘Wearing apparel; dressing and dyeing of fur’.

On the other hand, the industry group ‘Furniture manufacturing’ grew the most–by 9.3 percent, followed by 9.1 percent in ‘Textiles’ and 6.1 percent in ‘Coke, refined petroleum products and nuclear fuel’.

Iraq oil exports hit record 2.8mn bpd in February

BASRA: Oil exports from Iraq rose to a record 2.8 million barrels per day (bpd) on average in February, Deputy Prime Minister for energy Hussain al-Shahristani told reporters on Saturday.
The figure was up from 2.228 million bpd in January thanks to the completion of work expanding the capacity of the southern Basra port, from which the bulk of Iraq's crude is shipped.
"These projects which we carried out relating to development and production have enabled Iraq to produce 3.5 million barrels per day and to export 2.8 million barrels per day, which is a historic figure," Shahristani told reporters at the Basra refinery as he attended a ceremony for the opening of new units.
Production reached 3.5 million bpd in February and Shahristani said if the autonomous Kurdistan region had pumped its share, the figure would have hit 4 million.
Current Kurdish production capacity stands below 400,000 bpd, and around one third of that is refined locally. The Kurds are at loggerheads with the Iraqi central government over oil rights, and stopped exporting crude via the national network more than one year ago.
Since then, they have been exporting smaller quantities on their own terms by truck, whilst building a separate pipeline to Turkey, enraging Baghdad, which claims sole authority to manage all Iraqi oil.
Of the 2.8 million bpd exported in February, 2.5 million came from Basra, Shahristani said. The rest was exported from the northern Kirkuk oilfields via a pipeline to Turkey that has repeatedly been sabotaged.
Iraq also used to export between 10,000-12,000 bpd of crude by truck across the border to Jordan, but conflict in the western province of Anbar put a halt to that this year.