India Industry


India: Industrial production grows at slowest pace in two years

November 12, 2011

In September, industrial output increased a paltry 1.9% over the same month last year, according to the so-called quick estimate for the index of industrial production (IIP). The subdued print undershot market expectations of a 3.5% increase and marked the slowest pace in two years. The slowdown was broad-based. Growth in the manufacturing sector stepped down from 4.0% in August to 2.1% in September, while the mining sector posted an outright contraction of 5.6% (August: -4.1% year-on-year). Output in the electricity sector also slowed over the previous month. On a use-based classification, the deterioration was mostly the result of a decline in the production of capital goods, which contracted 6.8% (August: +4.0% yoy). In contrast, growth in the production of consumer goods rose from 2.2% in August to 3.5% in September, which was the result of an expansion in consumer durables that more than offset a contraction in non-durables. Owing to the subdued reading, the trend in industrial production began to deteriorate, with annual average growth falling from 7.0% in August to 6.7% in September


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