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India: Industrial production tallies second consecutive strong expansion in May

July 11, 2014

Industrial production expanded 4.7% over the same month last year in May according to the Quick Estimate of the Index of Industrial Production (IIP). The reading marked an improvement over the 3.4% rise tallied in April and exceed market expectations of a 3.6% expansion.

The expansion was mainly driven by improvements in manufacturing; the category expanded 4.8% annually in May, which was up from the 2.5% rise seen in April and marked the strongest expansion since October 2012. Mining output also registered an improvement, although it only inched up from April’s 2.6% rise to 2.7% in May. Conversely, electricity decelerated from the 11.9% rise tallied in April to a smaller 6.3% expansion in May.

Among the categories that measure the type of goods produced, production of consumer goods rebounded strongly and expanded 3.7% in May, contrasting the 4.7% decline recorded in April. The production of basic goods decelerated from a 7.3% increase in April to a 6.3% rise in May. Capital goods also decelerated from the strong 14.3% expansion seen in the previous month to a 4.5% increase in May. Finally, intermediate goods also decelerated to a 2.7% expansion, which was down from April’s 3.4% rise.

FocusEconomics panelists expect industrial production to increase 3.6% in fiscal year 2014/2015, which is unchanged from last month’s forecast. For fiscal year 2015/2016, the panel expects industrial output to expand 5.5%.


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India Industry May 2014

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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