India Industry June 2016


India: Industrial production picks up pace in June

August 12, 2016

Industrial production accelerated in June, recording the largest expansion since October. Industrial output rose 2.1% compared to the same month last year, which followed May’s revised 1.1% increase (previously reported: +1.2% year-on-year). The print overshot market analysts’ expectations, who had expected a milder acceleration to 1.5% growth.

June’s upturn was driven by a broad-based improvement in the index. Manufacturing growth rose from 0.6% in May to 1.0% in June, an eight-month high. In addition, mining output accelerated from a 1.4% increase to a notable 4.7% expansion and electricity output grew 8.3% (May: +4.7% yoy).

On a use-based classification, the production of basic, intermediate and consumer goods all gained steam. However, the contraction in capital goods production intensified.

Despite the result, the trend continued to point downward. Annual average growth in industrial production eased from May’s 2.0% to 1.9%, which represented an 18-month low.

FocusEconomics panelists expect industrial production to increase 6.2% in fiscal year 2016, which is unchanged from last month’s forecast. For fiscal year 2017, the panel expects industrial output to expand 6.7%.

Author: Angela Bouzanis, Lead Economist

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