India: Industrial output growth slows to 18-month low
January 12, 2011
Growth in the industrial sector is slowing. In November, industrial production grew a paltry 2.7% over the same month the previous year, based on the so-called quick estimate for the index of industrial production. The print represented a notable slowdown compared to October's robust 11.3% (previously reported: +10.8% year-on-year) and nearly halved market expectations of a 6.6% increase. Weaker growth in manufacturing (October: +11.9% yoy; November: +2.3% yoy), which accounts for nearly three quarters of total industrial output, was the most important driver behind the deceleration. However, growth also slowed in the mining sector (October: +6.5% yoy; November: +6.0% yoy) and in electricity production (October: +8.8% yoy; November: +4.6% yoy). On a use-based classification, the monthly deceleration was broad-based, with growth in all categories slowing compared to October. In particular, the production of consumer goods swung form a 9.6% expansion in October to a 3.1% contraction. Meanwhile, the production of basic goods moderated to a 4.5% increase (October: +8.8% yoy), while intermediate goods output grew only 2.4% (October: +10.6% yoy). As a result of the weak figure, annual average growth in industrial production moderated from 12.5% in October to 11.8% in November.