Capital goods production expands in June, led by capex revival

The capital goods output, a crucial indicator of investment, increased by 26.1% over the corresponding period in the previous year, the largest increase among the index's major categories, according to the Index of Industrial Production for June, which was released on August 12, 2022.

"Government capex activity is on track. This will usher private capex and demand," said Mr. Sameer Narang, head of economic research group and Ms. Tanisha Ladha, research analyst at ICICI Bank Research.

As evidenced by the order books for the first quarter of FY 2022-23, companies in the capital goods sector are already pointing to a recovery in private capex. This occurred despite the fact that the capital goods sector's first quarter was typically poor.

The combination of strong order backlogs, supported by ongoing demand would help the capital goods market in the future.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.