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India: Industrial production loses steam in May

July 10, 2015

In May, industrial production expanded 2.7% compared to the same month last year. The reading was below April’s revised 3.4% increase (previously reported: +4.1% year-on-year), and undershot the 3.6% expansion the market had expected.

The deceleration in May was driven by a slowdown in manufacturing. Manufacturing production rose 2.2% over the same month last year, which was below April’s 4.2% rise. In contrast, electricity rebounded to an expansion and mining picked up steam, growing 2.8% in May, which was above April’s meagre 0.2% growth.

On a use-based classification, the figure was driven by an almost across-the-board deterioration. Production of capital, intermediate and consumer goods all deteriorated compared to the previous month.

Corroborating the worse performance in industrial production, the trend deteriorated. Annual average growth in industrial production fell from 2.8% in April to 2.6% in May.

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 May 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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