The government is set to announce the Index of Industrial Production (IIP) on Wednesday (September 12, 2012).
The infrastructure sector, which grew at a poor 1.8 per cent in July 2012 compared to 3.9 per cent in the previous month, is expected to have weighed down on the July 2012 IIP.
Exports too fell 14.8 per cent in July and may have impacted output data.
Shrinking export orders and sluggish output dragged Indian manufacturing growth in July down to its weakest pace since last November, a business survey showed on Wednesday.
The HSBC manufacturing Purchasing Managers' Index (PMI), which gauges business activity at India's factories but not utilities, fell to 52.9 in July, from 55.0 in June - its biggest one-month drop since September last year.
The brokerages polled include Nomura (1.5 per cent), HDFC Bank (0.2 per cent), StanChart (-0.7 per cent), CLSA (0.5 per cent), Barclays (-0.2 per cent), CARE (1 per cent), Credit Suisse (1 per cent), Deutsche Bank (1 per cent), HSBC (0.3 per cent), ICRA (0.3 per cent), ING Vysya (0.5 per cent), JPMorgan (-0.7 per cent), Kotak Securities (-0.3 per cent), Moody's Analytics (1.5 per cent), RBS (-0.5 per cent), UBS (0 per cent), Yes Bank (0.7 per cent), SBI (2 per cent) and Religare (0.8 per cent).
Industrial output accounts for a little over 15 per cent of the country’s gross domestic product (GDP), which languished near a three-year low of 5.5 per cent annually in the June 2012 quarter.
Contraction in manufacturing spread further around the world in July and August as the Eurozone’s troubles inflicted more damage on the global economy, business surveys showed.
Data already out showed India's exports tanked almost 15 per cent in July and have fallen four times in the last five months, with officials attributing weak demand from the United States and Europe for the fall.
Also, the country's eight key infrastructure industries, which account for almost 40 per cent of factory output, expanded just 1.8 per cent in July, the slowest pace since January this year.
High interest rates, lack of government reforms, rising raw material prices and weak investments have also hit domestic demand.
Capital goods output, a key investment indicator, has grown only once in the past 10 months.
(With inputs from Thomson Reuters)