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India: Industrial production loses steam in March

May 13, 2015

In March, industrial production expanded 2.1% compared to the same month last year. The reading was below February’s revised 4.9% increase (previously reported: +5.0% year-on-year), and undershot the 2.8% expansion the market had expected. In addition, March’s result marked a five-month low.

The deceleration in March was broad-based. Manufacturing production rose 2.2% over the same month last year, which was below February’s 5.2% rise. Mining expanded 0.9% in March, which was below February’s 1.9% increase. In addition, production of electricity slowed.

On a use-based classification, the figure was driven by a fall in the production of consumer goods, which swung to contraction, and a deceleration in the production of basic goods. In contrast, the production of intermediate goods accelerated in March.

Despite the slowdown, the trend improved. Annual average growth in industrial production rose from 2.6% in February to 2.8% in March.

FocusEconomics panelists expect industrial production to increase 6.1% in fiscal year 2015/2016, which is down 0.4 percentage points from last month’s forecast. For fiscal year 2016/2017, the panel expects industrial output to expand 7.1%.


Author: Angela Bouzanis, Senior Economist

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India Industry March 2015

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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