Factory output reaches 17-month high of 8.4% in November

Index of Industrial Production (IIP) or factory output for the month of November 2017 overshooted at 8.4% compared to 2.2% in the month of October 2017 and 4.10% in September 2017.

source: tradingeconomics.com

Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 for the month of November 2017 have been released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation. 

A Bloomberg poll of economists expected November months IIP to come in at 4.4%.

Data compiled by CSO mentioned that the General Index for the month of November 2017 stands at 125.6, which is 8.4% higher as compared to the level in the month of November 2016. The cumulative growth for the period April-November 2017 over the corresponding period of the previous year stands at 3.2%.

Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of November 2017 stand at 107.4, 127.5 and 140.1 respectively, with the corresponding growth rates of 1.1%, 10.2% and 3.9% as compared to November 2016.

Cumulatively growth in these three sectors during April-November 2017 over the corresponding period of 2016 has been 3.0%, 3.1% and 5.2% respectively.

While under manufacturing sector,  fifteen out of the twenty three industry groups (as per 2-digit NIC-2008), have shown positive growth during the month of November 2017, as compared to the corresponding month of the previous year. 

Under manufacturing, industries like pharmaceuticals, medicinal chemical and botanical products’ has shown the highest positive growth of 39.5% followed by 29.1% in ‘Manufacture of computer, electronic and optical products’ and 22.6% in ‘Manufacture of other transport equipment’.

At the same time, other manufacturing’ group that has shown the highest negative growth of (-) 15.9% followed by (-) 13.1% in ‘Manufacture of wearing apparel’ and (-) 11.2% in ‘Manufacture of electrical equipment’.

As per Use-based classification, the growth rates in November 2017 over November 2016 are 3.2% in Primary goods, 9.4% in Capital goods, 5.5% in Intermediate goods and 13.5% in Infrastructure/ Construction Goods. 

Moreover, the  Consumer durables and Consumer non-durables have recorded growth of 2.5% and 23.1% respectively.

Along with the Quick Estimates of IIP for the month of November 2017, the CSO stated that,  the indices for October 2017 have undergone the first revision and those for August 2017 have undergone the final revision in the light of the updated data received from the source agencies.

The November 2017 month's data comes as a surprise to experts, as when data for October month were released, the IIP became nearly half compared to that of previous two months in 2017. 

Earlier, Upasna Bhardwaj, Madhavi Arora and Suvodeep Rakshit, analysts at Kotak Institutional Equities, said, "Despite the weak IIP print, overall high frequency data have been pointing towards a gradual cyclical recovery."

On IIP data, the analysts at Edelweiss Financial Services said, "Slowing IIP manufacturing perhaps reflects normalisation from the jump seen in the previous month led by restocking as well as early festive season demand."
 
Aditi Nayar, Principal Economist at ICRA, said, "The early indicators for industrial production in the organised sectors in November 2017 provide mixed signals, with a deterioration in pace of YoY growth of output of Coal India Limited and electricity generation, but a sharp improvement in the expansion of automobile production."