India: Industrial output growth eases further in October
Industrial output increased 3.1% compared to the same month of the previous year in October, which was weaker than September’s 3.3% expansion. The slowdown was largely driven by weaker manufacturing growth, which was only partially offset by stronger mining and quarrying, and utilities output growth.
Meanwhile, the trend deteriorated marginally, with the annual average growth of industrial production coming in at 18.8% in October, down from September’s 18.9%.
Commenting on the current state of the economy, analysts at Nomura noted:
“The sequential rise in IP is likely to have been somewhat supported by a pre-Diwali boost –industrial production typically tends to rise in the month before Diwali (November this year) as firms build inventory to meet festive demand, while production falls during the Diwali month due to less working days. Seasonality aside though, we remain cautious on the overall growth outlook for Q4 2021. The supply-side bottlenecks on coal and chips are likely to persist into November, as evidenced by lackluster auto sales. Other preliminary data for November also suggest a broad-based easing of the growth momentum, even as the economic reopening is supporting a pick-up in mobility and services.”