India: Industrial production drops in November
January 15, 2016
In November, industrial production fell 3.2% compared to the same month last year, which marked the first contraction in one year and the worst result since October 2011. The reading contrasted October’s 9.9% increase, which had marked a multi-year high, and surprised market analysts who had expected a 2.3% expansion.
November’s drop was driven by a notable deterioration in manufacturing, which swung from 10.6% growth in October to a 4.4% contraction. In addition, notable slowdowns were tallied in mining and electricity production. Growth in mining output eased from 5.2% in October to 2.3% in November, while electricity production grew a meagre 0.7% (October: +9.0% year-on-year).
On a use-based classification, the slowdown was driven by a notable contraction in the production of capital goods. In addition, basic goods and intermediate goods fell over the same month of last year, while growth in consumer goods eased significantly.
As a result of the fall in industrial production, the trend points downward in November. Annual average growth in industrial production eased from October’s 4.4% to 3.7%.