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Wednesday, September 12, 2012

Industrial production growth returns to positive zone, but remains week

IIP growth for June revised upward slightly to (-) 1.75%, but that for revised downward (-) 1.26% 

India's industrial production growth improved to positive zone at minor growth of (-) 0.1% during July 2012, snapping sharp decline of 1.75% posted in June 2012. Industrial production growth was driven up by electricity generation rising 2.8% during July 2012. But, the mining and manufacturing output declined 0.7% and 0.2%, respectively in July 2012. 

As per the use based classification, there have been negative growths in capital goods (-5.0%) and intermediate goods (-1.1%) whereas positive growths have been achieved in basic goods (1.5%), consumer durables (1.4%) and consumer non-durables (0.1%)
The industrial production declined for July 2012 was below economists expectations of 0.4% growth projected for the month. As per the poll of economists conducted by Capital Market, India's industrial production was expected to increase 0.4% during July 2012. The economists responding to the poll had forecasted the IIP growth in the wide range of (-) 2.1% to 1.0% for July 2012. The median of various IIP growth forecast stood at 0.4%, while the average was lower at 0.3% for July 2012. 

In terms of industries, about eight (08) industry groups out of the twenty two (22) industry groups in the manufacturing sector have shown positive growth. The industry group 'Publishing, printing & reproduction of recorded media' has shown the highest growth of 17.0%, followed by 12.5% in 'Machinery and Equipment n.e.c.' and 8.3% in 'Textiles'. On the other hand, the industry group 'Electric machinery and apparatus n.e.c.' has shown a negative growth of 12.8% followed by 12.2% in 'Office, accounting and computing machinery' and 11.5% in 'Furniture; manufacturing n.e.c.'. 

Some of the important items showing high positive growth are: 'Antibiotics & its Preparations' (32.3%), 'Air Conditioner (Room)' (117.4%), 'Plastic Machinery Incl. Moulding Machinery' (63.0%), 'Newspapers' (19.0%), 'Generator/ Alternator' (58.1%), 'CR Sheets' (23.5%), 'Lubricating Oil' (92.1%), 'Petroleum Coke' (76.4%), 'Aerated Waters & Soft Drinks' (53.7%) and 'Sealed Compressors' (75.8%). 

Some of the other important items showing high negative growth during the current month over the same month in previous year include 'Cable, Rubber Insulated' [(-) 39.6%], 'Sponge Iron' [(-) 23.6%], 'Fruit Pulp' [(-) 42.5%], 'Gems and Jewellery' [(-) 18.9%], 'Leather Garments' [(-) 37.0%], 'Sugar' [(-)56.7%], 'Vitamins' [(-) 42.2%], 'Fasteners (Excl. Zip Fasteners)' [(-) 20.2%], 'Ship Building & Repairs' [(-) 37.8%], 'Biscuits' [(-) 21.0%] and 'Grinding Wheels' [(-) 20.5%]. 

The indices for June 2012 have undergone the first revision and those for April 2012 have undergone the final revision in the light of the updated data received from the source agencies. The growth of the industrial production for June revised upward to (-) 1.75% compared to (-) 1.81% reported earlier, while that for April 2012 was revised downward to (-) 1.26% from (-) 0.9% reported earlier.
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