Industrial Production

IIP growth rebounds to 4.3% YoY in July 2019 amidst a weak economy.

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

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

Recent Data Trend

The growth in index of industrial production (IIP) registered a broad-based uptick of 4.3% YoY in July 2019 after declining to a four-month low of 2% YoY in the previous month. However, the growth was lower compared to 6.5% YoY in the same month last year. The recovery in IIP was in line with growth in eight core industries output which accelerated to 2.1% YoY in July. The composite Purchasing Managers' Index (PMI) produced by IHS, too signalled an improvement in IIP in July, which increased to an eight-month high of 53.9 for the same month.

Although the growth in July was broad-based, it was primarily on the back of stronger readings in the manufacturing and the mining sector. These sectors grew by 4.2% YoY and 4.9% YoY in July, as against 1.2% YoY and 1.6% YoY in the last month, respectively. The electricity sector, on the other hand, saw a moderation in July and declined to 4.8% from 8.2% in June.

By use-based classification, capital and consumer durables continued to drag on industrial production growth. On the contrary, the output of primary goods, intermediate and consumer non-durable goods aided the overall increase in IIP in July.

The cumulative growth for the period April-July 2019 stands at 3.3% YoY as against 4.3% YoY for the corresponding period last year.

A pick up in industrial output amidst a slowing economy, is surely a welcome news. However, the growth in industrial production has been fragile and inconsistent since November 2018, reflecting the persisting slowdown in the domestic economy. Since CPI inflation recorded in August is still within RBI's band of 4%, we expect another rate cut given the economic growth concerns.

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: October 11th, 2019