Industrial Production

Industrial output continues to contract, indicating no signs of policy measures transmission.

Published monthly by Ministry of Statistics and Programme Implementation(MOSPI). Updated till October 2019 (Published on December 12th, 2019).

Note: The MoM% has been calculated over the seasonally-adjusted series.

Recent Data Trend

The contraction in industrial production continued into the third consecutive month in October. The industrial production output fell by 3.8% YoY in October, driven by a broad-based contraction in its components. It indicates that the industries are yet to recover from the effects of the slowdown even after a big announcement of the corporate tax cut by the government in September. However, the slowdown was at a moderated pace when compared to a contraction of 4.3% YoY in the previous month.

Although industrial production has been contracting for the past three months, it has been showing moderate and uneven growth since November 2018. It was mainly dragged down by the downturn in the manufacturing and mining sector with sluggishness, particularly visible in the production of capital goods, infrastructure, and consumer durables. Capacity utilisation in manufacturing fell to 73.6% in the June quarter 2019 from 76% in the December quarter 2018, emphasizing the magnitude of the slowdown in the manufacturing sector.

The manufacturing and mining sectors contracted by 2.1% YoY and 8% YoY in October as against 4% YoY and 8.6% YoY in the last month, respectively. 18 out of 23 sectors withing manufacturing recorded negative growth with machinery and motor vehicles contracting by more than 15% YoY in October.

By use-based classification, both capital and consumer goods continued to drag on industrial production growth. Intermediate goods, a rare bright spot in India's business activity, rose to 22.2% YoY in October as against 7% YoY in the last month, raising some hope for recovery in the index of industrial production growth in a few months.

We believe that the protracted slowdown in industrial growth, which has already pulled down the GDP growth to a six-year low in the July-September quarter of 2019, may continue to have a bearing on GDP even in the next quarter.

Brief Overview

Index of Industrial production is published by the Ministry of Statistics and Programme Implementation every month. The current base year of the index is 2011-12=100. The index shows the changes in the production volume of different industrial commodities. The sub-components of IIP are- Mining, Manufacturing, and Electricity. The IIP is also classified according to its use namely, Primary Goods, Capital Goods, and Intermediate Goods. It is an essential measure of growth as it records the level of industrial activity in the economy.

For more information visit the official government website

IIP- Use based classification

Industrial Production-Quarterly

Note: The QoQ% has been calculated over the seasonally-adjusted series.

Industrial Production-Annual

Next release date: January 10th, 2020