Industrial Production Rises More-Than-Expected In December
Smartphones are assembled at Dixon Technologies’ Padget Electronics Pvt factory in Noida, Uttar Pradesh, India, on Thursday, Jan. 28, 2021. Photographer: Anindito Mukherjee/Bloomberg

Industrial Production Rises More-Than-Expected In December

India’s industrial output rose at a stronger than expected pace in December.

The Index of Industrial Production rose 1% in December 2020 compared a revised estimate of a contraction of 2.1% in November 2020, according to data by the Ministry of Statistics and Programme Implementation on Friday.

A poll of 31 economists by Bloomberg had forecast December IIP growth at 0.1%.

Also read: India’s CPI Inflation Falls To Lowest In 16 Months In January

Industrial output in December 2020 benefitted from a favourable base effect and was broad-based across the sectors, said Aditi Nayar, principal economist at ICRA. However, even as many lead indicators have displayed a robust pace of expansion in the recent months, the subdued 1% growth of the IIP in the October-December 2020 quarter suggests that the recovery in the broader economy remains relatively measured, Nayar said.

Sectoral Estimates

Among the three key sectors, mining remained in contraction but manufacturing and electricity saw an expansion in activity.

  • Mining output contracted 4.8% in December compared to a contraction of 6.6% in November.
  • Manufacturing output rose 1.6% after a contraction of 2% last month.
  • Electricity generation rose 5.1% in December compared to a rise of 3.5% in November.

Industrial output, as classified by the end-use of goods, indicated growth across all segments expect primary goods.

  • Primary goods output contracted by 0.3% in December compared to a contraction of 2.3% in November.
  • Capital goods output grew 0.6% versus a fall of 7.3% in the previous month.
  • Intermediate goods output grew 0.4% after it contracted 2.6% last month.
  • Infrastructure and construction goods output grew 0.9% after a growth of 1.7% in November.
  • Consumer durables output grew 4.9% compared to a contraction of 3.4% previously.
  • Consumer non-durables output grew 2% compared to a contraction of 1.3% in November 2020.
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