India: Industrial output quickens in September
October 10, 2014
In September, industrial production expanded 2.5% over the same month last year, according to the Quick Estimate of the Index of Industrial Production (IIP). The reading was well above both the 0.5% increase observed in August and the 0.8% expansion the market had expected.
The strong increase registered in September mainly reflected a rebound in manufacturing output, which increased 2.5% annually in September and contrasted the 1.3% contraction tallied in August. Meanwhile, electricity production and mining also increased in September, although at a slower pace than in the previous month.
On a use-based classification, the figure was mainly driven by a strong expansion in the production of capital goods, which jumped 11.6% year-on-year in September (August: -9.8% yoy). In addition, intermediate goods bounced back and increased in September, contrasting a deterioration in August.
The trend continues to hover around 1.0%: annual average growth in September in industrial production remained at August’s 1.1%.
Author: Ricardo Aceves, Senior Economist