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Feb industrial output may have slowed slightly: poll

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Reuters Bangalore

The country's February industrial output probably slowed a tad from January's surge, as growth in the manufacturing and consumer non-durables sectors likely moderated, a Reuters poll showed.

A survey of 26 economists showed they expect industrial production (IIP) to grow 6.6% in February from a year ago, slightly lower on a sequential basis when compared with January's 6.8%.

Forecasts in the poll ranged from 3.5% to 9.5%, reflecting the notoriously volatile nature of the IIP data.

"A lower PMI and easing export growth in February 2012 point towards a moderation of manufacturing growth," said Aditi Nayar, economist at ICRA Ltd, which forecasts a 4.2% rate for the month.

India's manufacturing sector expansion, as measured by the purchasing managers' index (PMI), eased slightly in February after hitting an eight-month high in January.

Growth in exports moderated in February when compared to January, on the back of sluggish demand for Indian goods in key markets such as the United States and Europe.

Signs that the downturn in the euro zone's smaller members has spread to core countries such as Germany and France, combined with weak jobs growth in the United States, have revived doubts about whether their economic recovery is on solid footing.

India's industrial output growth painted an optimistic picture in January by clocking its fastest pace in seven months, boosted by strong manufacturing sector activity and a surprise jump in consumer non-durables.

The consumer non-durables sector grew by 42.1% in January from a year earlier, while manufacturing output, which accounts for 76% of industrial production, expanded 8.5% in January from 2.6 in December.

Economists said the huge jump in the consumer non-durables number was a one-off event. That kind of boost "is unlikely to be sustained," said ICRA's Nayar.

However, India's infrastructure sector output, which accounts for around 38% of industrial output, grew by a sharp 6.8% in February from a year earlier, much higher than January's on-year increase of 0.7%.

"The performance of the core sector has been impressive in February, which is going to contribute towards the higher number coming in for the overall IIP," said Madan Sabnavis, chief economist at CARE Ratings, who forecasts 6.7% IIP growth.

 

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First Published: Apr 10 2012 | 1:47 PM IST

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