India Industry May 2016


India: Industrial production rebounds in May

July 12, 2016

Industrial production rebounded in May, recording the largest expansion in three-months. Industrial production rose 1.2% compared to the same month last year, which contrasted April’s 1.3% decrease. The print surprised market analysts, who had expected a 0.8% decline.

May’s expansion was driven by a rebound in manufacturing output, which swung from a -3.7% drop in April to 0.7% growth. In addition, mining output picked up pace expanding 1.3% (April: +1.1% year-on-year. However, electricity production lost steam with growth falling to 4.7% in May from April’s 14.6%.

On a use-based classification, the contraction in capital goods abated in May and consumer goods production returned to growth. In addition, intermediate goods production gained steam.

Despite the result, the trend continued to point downward. Annual average growth in industrial production eased from April’s 2.2% to 2.1%, which represented a 16-month low.

FocusEconomics panelists expect industrial production to increase 6.0% in fiscal year 2016, which is unchanged from last month’s forecast. For fiscal year 2017, the panel expects industrial output to expand 6.3%.

Author: Angela Bouzanis, Senior Economist

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India Industry Chart

India Industry May 2016

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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