India Industry


Industrial production contracts for second consecutive month

Industrial production fell for the second consecutive month after having increased for four months in a row. Industrial output contracted 2.2% in June over the same month last year, according to the Quick Estimate for the Index of Industrial Production (IIP). The reading slightly improved over the revised 2.8% decline observed in May (previously reported: -1.6% year-on-year), but did not meet market expectations of a 1.2% drop.

The contraction was the result of a drop in mining and quarrying (May: -5.9% yoy; June: -4.1% yoy), as well as in manufacturing output (May: -3.6% yoy; June: -2.2% yoy). Regarding a use-based classification, output of consumer goods, particularly of durable consumer goods, showed a notable contraction.

As a result of the milder drop in June, the trend flattened, with annual average growth in industrial production remaining unchanged at May's 1.0%.

FocusEconomics panellists expect industrial production to increase 3.9% in fiscal year 2013/2014, which is down 0.4 percentage points from last month's forecast. For fiscal year 2014/2015, the panel anticipates industrial output to expand 5.8%.

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India Industry Chart

India Industry June 2013

Note: Year-on-year and annual average variation of industrial production index in %.
Source: Ministry of Statistics and Programme Implementation (MOSPI) and FocusEconomics calculations.

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