IIP pegged at 6.6% for July

India’s industrial output in July grew 6.6 percent from a year earlier, helped by a rise in the sales of consumer durables ahead of festive season, government data showed on Wednesday.

Background

Factory output measured by the Index of Industrial Production (IIP) is the closest approximation for measuring economic activity in the country’s business landscape, according to the data released by Central Statistics Office (CSO).

Analysis

Factory output measured in terms of the Index of Industrial Production had expanded by just 1% in July last year, according to the data released by Central Statistics Office (CSO).

The IIP growth for June was also revised downwards to 6.8% from the provisional estimate of 7% released last month, the data showed. 

The manufacturing sector recorded a 7% growth in July as against a contraction of 0.1% in the same month year ago. 

The consumer durables sector recorded an impressive growth of 14.4% in July against a dip of 2.4% year ago. Capital goods production grew by 3 per cent in July as against a decline of 1.1% a year ago.

The IIP growth in April-July period was 5.4 % compared to 1.7% year ago.

In terms of industries, 22 out of 23 industry groups in the manufacturing sector showed positive growth during July 2018.

Assessment

Our assessment is that the manufacturing index will remain closer to 7 percent for the quarter ending September 2018.