Industrial Production India

India's industrial output grows moderately by 4.5% in September.

Published monthly by Ministry of Statistics and Programme Implementation(MOSPI). Updated until the month of September 2018. (Published on November 12th, 2018).

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

Recent Data Trend

In Sep'18, the industrial output grew moderately by 4.5% year-on-year (YoY) compared to previous month's 4.3% YoY and relatively above the 4.1% YoY growth in Sep'17. The rise in the production growth was slightly above the market expectations (Reuters poll) of 4.3% YoY growth. The eight-core industries output for Sep'18 already signaled only a slight pickup in industrial output as eight core industries output, which constitutes 40% of the total industrial production accelerated to 4.3% YoY.

The uptick in industrial output expansion was mainly due to growth in the manufacturing and electricity generation activities.

The manufacturing which constitutes 77% of the index grew by 4.6% YoY in Sep'18 compared to a 3.8% YoY rise in Sep'17. Of the 23 industries in the manufacturing, 17 recorded positive growth, led by machinery and equipment, anti-diabetic drugs and consumer vehicles. Further, electricity generation sector rose by a 3-month high pace of 8.1% YoY compared to a 3.4% YoY growth in Sep'17.

Slower expansion in mining by 0.2% led to overall pull in industrial growth.

On a quarterly basis, the industrial production growth increased to 5.1% YoY, during Apr-Sep'18. As industrial production and real GDP growth are highly correlated, the economic growth momentum has certainly declined after the first quarter of FY19.

According to the use-based classification, production of capital goods slowed to 5.8% YoY rebounding from a contraction of 3% YoY in Jun'18. The rebound in growth was partially uplifted by the favorable base effect. Production of consumer non-durable goods slowed to 6.1% YoY from 10.5% YoY in Sep'17. Construction and consumer durables goods showed a positive growth of 9.5% YoY and 5.2% YoY respectively.

We feel industrial growth has become fragile and uneven since the last three months. The industrial production growth free from the favorable base effect, the YoY% 3month measure also indicates that the trend production growth declined to 4.8%. Certainly, the volatility in the industrial production will pull down the economic growth even after recovering from impacts of implementing demonetization and GST.

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

Next release date: December 12th, 2018

Industrial Production-Quarterly

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

Industrial Production-Annual