IIP Data: Industrial Production Falls 0.3% In December

India’s industrial output contracted in December, countering signs that suggested the economy is bottoming out.

The Index of Industrial Production fell 0.3 percent in December 2019 compared with an increase of 1.82 percent in November, according to a statement by the Ministry of Statistics and Programme Implementation. Thirty-six economists polled by Bloomberg had pegged IIP growth at 1.7 percent.

The industrial output data is a reminder of the persisting weakness in the Indian economy even though some indicators like the Purchasing Managers’ Index have shown improvement. The pick-up in PMI, led by new orders, had prompted economists to call a bottom to India’s economic slowdown.

Sectoral Data

Output of 16 of the 23 industry groups in the manufacturing segment—that makes up over three-fourth of the index—contracted in December.

• Mining output rose 5.4 percent in December compared with a growth of 1.7 percent in November 2019.
• Manufacturing output contracted 1.2 percent after growing 2.7 percent in the previous month.
• Electricity generation contracted 0.1 percent compared with a contraction of 5 percent in November 2019.

Industrial output, as classified by end-use of goods, indicated a contraction in capital goods and consumer durables and non-durables.

• Primary goods output grew 2.2 percent in December compared with a contraction of 0.3 percent in November.
• Capital goods output contracted 18.2 percent against a contraction of 8.6 percent in the previous month.
• Intermediate goods output grew 12.5 percent compared with a growth of 17.1 percent in November.
• Infrastructure and construction goods output contracted 2.6 percent compared with a contraction of 3.5 percent in the preceding month.
• Consumer durables output contracted 6.7 percent compared with a contraction of 1.5 percent in the previous month.
• Consumer non-durables output contracted 3.7 percent against a growth of 2 percent in November 2019.