IIP: Industrial Output Rises 3.1% In September

India's factory output in September rose over a year ago but moderated compared to the previous month. Shortage of coal supplies during the month weighed on electricity output even as manufacturing activity remained flat.

The Index of Industrial Production rose 3.1% over a year earlier in September compared to a rise of 12.03% in August 2021. On a month-on-month basis, the index fell 2.6% in September. Twenty-eight economists polled by Bloomberg had forecast September IIP growth at 4.8%.

Sectoral Estimates For September

• Mining output rose 8.6% over a year ago. Compared to a month ago, output was lower by 8.4%.

• Manufacturing output rose 2.7% but was marginally lower than in August.

• Electricity generation rose 0.9% compared to a year ago but fell 11% compared to a month ago. Strained supplies of coal impacted output during the month.

Industrial output, as classified by the end-use of goods a sequential decline across key categories.

• Primary goods output rose 4.6% in September on an annual basis. It fell 7.8% sequentially.

• Capital goods output rose by 1.3% annually and 0.5% over a month ago.

• Intermediate goods output rose by 4.9% annually but fell 1.9% over a month ago.

• Infrastructure and construction goods output rose 7.4% in September over a year ago. Month-on-month, it fell 2.1%.

• Consumer durables output was 2% lower than a year ago. However, it rose 6.7% over a month ago.

• Consumer non-durables output was 0.5% lower than a year ago and 0.9% lower than a month ago.

"Both consumer durables and non-durables recorded negative year-on-year growth in September 2021. This shows that despite the onset of the festival season, the industrial output has remained subdued," said Sunil Kumar Sinha, principal economist at India Ratings and Research. However, this appears to be in contrast with the retails sales figures that has been reported in the media, Kumar said. "Perhaps one way to reconcile the retail figures and IIP data is to take average year-on-year growth of August and September since the production figures of both these months builds the inventory for the festival season," he added.