India: Industrial production contracts in November
January 11, 2013
In November, industrial production declined 0.1% over the same month the previous year, according to the so-called quick estimate for the index of industrial production (IIP). The reading was in line with market expectations, but contrasted the revised 8.3% expansion observed in October (previously reported: +8.2% year-on-year).
The monthly deterioration, which mainly reflected seasonal factors due to the Diwali holiday, was driven by a drop in mining activity and a sharp deceleration in the all-important manufacturing sector compared to the previous month. On a use-based classification, the monthly print reflected a deterioration in all sub-categories, particularly in capital goods, which dropped 7.7% in November.
As a result of the monthly reading, the trend returned to its downward trajectory, with the annual average growth in industrial output falling from 1.7% in October to 1.1% in November.
Author: Ricardo Aceves, Senior Economist