(Bloomberg) — India’s factory output shrank to the lowest level in eight years, as a sharp fall in capital goods production underlined weak demand in Asia’s third-largest economy.

The index of industrial production fell 4.3% in September, data released by the Ministry of Statistics showed Monday. That compares with an estimate for a 2.5% contraction, and is the lowest since October 2011.

Key Insights

• Capital goods output dropped 20.7% from a year ago, while consumer durables fell 9.9%
• The second straight month of decline in factory output caps yet another quarter of subdued activity, belying expectations of a quick recovery after economic growth slipped to a six-year low of 5% in the April-June period
• Gross domestic product data for the three months to September is due Nov. 29 and will probably show a mild recovery in growth to 5.5%. Economists, however, say that may be more because of a favorable base effect