India Industry December 2015


India: Industrial production in December contracts for second consecutive month

February 15, 2016

In December, industrial production fell 1.3% compared to the same month of the previous year, which marked the second consecutive contraction. The reading followed November’s revised 3.4% drop (previously reported: -3.2% year-on-year), which had marked a multi-year low, and surprised market analysts who had expected a modest 0.2% fall.

December’s more moderate drop was driven by an across-the-board improvement. Mining output picked up from a 1.9% expansion in November to a 2.9% increase, while growth in electricity production accelerated to 3.2% (November: +0.7% yoy). Although manufacturing production improved from the previous month’s notable 4.7% decrease, it still recorded a pronounced fall of 2.4% in December.

On a use-based classification, the production of capital goods still recorded a pronounced contraction, although improving from November’s result. Production of intermediate and basic goods rebounded in December.

As a result, the trend continued to point downward in December. Annual average growth in industrial production eased from November’s 3.7% to 3.3%.

FocusEconomics panelists expect industrial production to increase 5.6% in fiscal year 2015, which is down 0.3 percentage points from last month’s forecast. For fiscal year 2016, the panel expects industrial output to expand 6.7%.

Author: Angela Bouzanis, Senior Economist

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India Industry Chart

India Industry December 2015 1

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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