Industrial Production Rebounds In January To 2.7%
January IIP was expected to grow 0.5 percent, according to the Bloomberg consensus estimate.
Industrial output in India rebounded in January, offsetting the impact of the note ban it had witnessed in December.
The Index of Industrial Production (IIP) rose 2.7 percent in January compared to a year ago, according to data from the Central Statistics Office. The Bloomberg consensus estimate stood at 0.5 percent. The December output was revised to a contraction of 0.1 percent from a decline of 0.4 percent.
On a cumulative basis from April-January, the index has grown 0.6 percent compared to 2.7 percent in the same period last year.
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The manufacturing sector, which had seen a slowdown in December due to the impact of the note ban, expanded 2.3 percent in January. The mining and electricity sectors grew 5.3 percent and 3.9 percent, respectively.
Manufacturing growth, though in the positive, remains fragile, said the president of industry body Federation of Indian Chambers of Commerce & Industry (FICCI), Pankaj Patel, who added that it continues to be a cause of concern.
Other sectors which contributed meaningfully to the rebound include the capital goods sector which saw an increase of 10.7 percent in output on a year-on-year basis while production of basic goods expanded 5.3 percent.
In terms of industry groups, the growth was led by the higher output in electrical machinery and apparatus n.e.c, which rose 42.4 percent year-on-year. Cable and rubber insulated items which had dragged the index down till October 2016 has shown positive growth in the last two months. In January, the activity in the segment grew 282.8 percent. Other high positive growth contributors were fruit pulp and vitamins, where output grew 121.5 percent and 46.9 percent, respectively.
The item that dragged the index most in January was hot rolled steel sheets where output declined 39.6 percent.
Other negative contributors were:
- Ship building and repairs saw 31.9 percent lower output
- Sugar output fell 28.2 percent
- Polyvinyl chloride (PVC) pipes and tubes output declined 27 percent.
- Leather garment production was lower by 24.3 percent