Industrial Production in India

Industrial Production Index Contracted 1.1 Percent in August 2019

India’s Industrial production, measured by index of industrial production (IIP), contracted 1.1 percent YoY in August as compared to expansion of 4.6 percent YoY in July 2019. The contraction in the index was largely driven by manufacturing and electricity sector. In terms of use-based classification of IIP, consumer durables and capital goods contributed most to the contraction. The contraction in the industrial output adds to the concerns amid slow economic growth.

Sectoral Performance of IIP:

• Manufacturing industries output that contributes over 77 percent to the IIP, contracted 1.2 percent YoY in August as compared to 4.2 percent growth in July 2019. Within manufacturing sector, vehicles, trailer and semi-trailers contracted 23.1 percent, while machinery and equipment contracted 10 percent in August 2019.
• Electricity generation contracted 0.9 percent YoY in August as compared to 4.7 percent growth in July 2019.
• Mining output grew 0.11 percent YoY in August as compared to 4.8 percent YoY previous month.

Use based segment performance of IIP:

• Capital goods output contracted 21 percent YoY in August as compared to contraction of 7.1 percent in July 2019, reflects subdued investment activity.
• Consumer durables output contracted 9.1 percent YoY in August as compared to decline of 2.7 percent YoY in July 2019.
• Consumer non-durables output, a barometer for the rural economy, grew 4.1 percent YoY in August against a growth of 8.3 percent YoY in the previous month.
• Infrastructure and construction goods output declined 4.5 percent YoY in August as compared to 2.1 percent rise in previous month.