Multimedia | IIP numbers decoded

Factory output growth contracts by 0.1% in November. Manufacturing growth at 0.3%

 

A worker assembles cars on the assembly line at a factory in Gurgaon. BS / File Photo

The industrial production contracted to 0.1% in November from a year earlier, government data showed on Friday.. It was 8.2% in October 2012 and has been revised to 8.3%.

Manufacturing, which constitutes about 76% of industrial production, rose 0.3% from a year earlier, the federal statistics office said.

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Multimedia | IIP numbers decoded
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Sajjid Chinoy | Not nearly as bad as it looks

Interpreting industrial production numbers is tricky at the best of times. The sharp gyrations in the capital goods sector, which accounts for less than 10 percent of the index, has resulted in a wildly oscillating IP index over the past year. This process gets more complicated around Diwali when base effects come into play, as production ramps up before the festive season and retraces thereafter.

Given all this, it’s no surprise that the markets have misread the IP print over the past two months.

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(The author isIndia economist at JP Morgan)
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Dhananjay Sinha | IIP growth to remain modest in Dec

IIP growth contraction in November at 0.1% YoY marked realignment to the muted growth trend seen during most of this fiscal. It follows an erratic 8.3% YoY bounce in October. In FY13, 5 out of 8 months have shown YoY contraction. YTD growth for Apr-Nov now stands at 1% vs 3.8% last year. The November IIP also witnessed a 1.4% on month contraction on a seasonally adjusted basis and follows a sharp 5% on month rise in October.

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(The author is Chief Economist, Emkay Global)
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 Indranil Pan | Worst maybe over for industrial production

No doubt IIP growth reversed trend in November after a stellar 8.3% in October. This is because of the seasonal factor whereby the manufacturing segment re-stocks ahead of the Diwali festive demand, which was anyways not expected to sustain. However, it was heartening to note that the growth was better than the market expectations and also my own expectations of a (-)2%.

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(The author is Chief Economist, Kotak Mahindra Bank)
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Anis Chakravarty | Dismal numbers, no surprise

Industrial growth has been lagging for some time and November IIP data is no exception. The favourable base effect of the earlier month has been negated. The readings are in line with the general trend emanating from the industry. Of the components, capital goods continue to be volatile. At – 7.7%, the sector is suffering from supply side issues. High direct and credit cost coupled with thin margins are affecting growth and output.

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(The author is Chief Economist, Deloitte India)
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Madan Sabnavis | Don't expect any good IIP numbers

The industrial growth numbers for the year have progressively become an academic exercise and while at times there appear to be signs of green shoots sprouting, it is morose for most of the other months. The fact is that there is not much happening in this space and growth rates of 8.2% in October or - 0.1% on November are more statistical images rather than a reflection of real industrial activity.

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(The author is chief economist, CARE Ratings)
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Rate cut in offing?

Politicians and businessfolk have been calling for the central bank to slash interest rates that are among the highest of the major economies.

The Reserve Bank of India (RBI) has left its policy repo rate unchanged at 8.0% since April 2011, citing stubbornly high inflation, but has signalled it could cut in the January-March quarter and eyes are now on an upcoming policy review on January 29.

Inflation numbers for both wholesale and retail prices are due to be released on Monday and should provide crucial pointer.(Reuters)

Nov IIP should lead to a rate cut: Experts
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IIP dip due to statistical reasons: Montek

Attributing decline in industrial output in November to statistical reasons, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said the growth has already bottomed out and efforts taken by the government will yield fruits in coming month.

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Preview
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Manufacturers barely increased production in November compared to the year before as factories closed for holidays a month later than in 2011, a Reuters poll found on Wednesday.

The survey of 25 economists predicted that the index of industrial production ( IIP), measuring output at factories, mines and utilities, rose just 0.7% year-on-year in November following an 8.2% rise in October.

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IIP may contract by 1.5%: BofA Merrill Lynch

Bank of America Merrill Lynch has said India's industrial output for the month of November is likely to contract by 1.5% largely owing to post-Diwali base effect. "November industrial growth will likely contract by 1.5% on post-Diwali base effects after jumping 8.2% last month to meet pre-Diwali consumer demand," Bank of America Merrill Lynch India economist Indranil Sen Gupta said in a research note.

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From Our Archives
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Graphics: how industry performed during the last 6 months



October | Industrial growth bounces back

India’s industrial production in October rose by a whopping 8.21 per cent from a year earlier, far above the market expectation. “I am very encouraged by the indications of the green shoots in economy in terms of production,” finance minister P Chidambaram said. Click here for more
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September | IIP slides 0.4%

The Index of Industrial Production (IIP) declined 0.4 per cent in September, mainly on account of a poor show by the capital goods and consumer durables sectors, which contracted 12.2 per cent and 1.7 per cent, respectively, implying a slowdown in investment activity and demand. Click here for more
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August | Industrial growth rebounds to 2.7%

Backed by consumer goods and a bit of recovery in the mining sector, industrial production beat market expectations to grow by six-month high of 2.7 per cent in August after two consecutive months of contraction. The reduction in the pace of deceleration in the capital goods sector also played a part in industrial recovery. Click here for more
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July | IIP grows a mere 0.1%

Hit hard by high interest rates and low demand, industrial production grew just 0.1 per cent in July, compared with a fall of 1.75 per cent in the previous month. The growth was marginal, despite a low base of 3.7 per cent in the corresponding period last year. Click here for more
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June | IIP shocker dims hopes of recovery

Industrial production contracted 1.8 per cent in June, official data showed on Thursday. The contraction was in sharp contrast with the whopping 9.5 per cent expansion in the same month last year. That prompted yet another agency, Moody’s Analytics, to project sub-six per cent economic growth for India this financial year. Click here for more
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May | IIP growth glimmers

Industrial production showed bleak signs of recovery in May, rising 2.4 per cent, owing to a slight uptick in electricity and consumer durables. This followed contraction for consecutive months. In May 2011, industrial growth had stood at 6.2 per cent. Click here for more