India: Industrial productions continues losing steam
April 11, 2011
In February, industrial output grew 3.6% over the same month the year before, according to the so-called quick estimate for the index of industrial production (IIP). The reading was below the 3.9% rise tallied in January (previously reported: +3.7% year-on-year) and undershot market expectations of a 5.1% increase. The deceleration over the previous month was mainly due to slower growth in electricity generation, which slowed from a 10.5% year-on-year increase in January to 6.7% in February. Meanwhile, growth in manufacturing, which accounts for around three quarters of total industrial output, remained virtually unchanged over the previous month at 3.5%. On a use-based classification, the figure continued to be underpinned by a contraction in the production of capital goods (January: -18.8% yoy: February: -18.4% yoy). Owing to the weak reading, the trend in industrial production continued to moderate, with annual average growth falling from 9.4% in January to 8.5% in February. The national statistical office recently stated that it expects industrial output to have risen by 8.0% in the current fiscal year, which ended March.