India’s industrial production increased by 5.8 per cent in September due to good show by manufacturing, mining and electricity sectors, according to the official data released on Friday.
Factory output measured in terms of the Index of Industrial Production (IIP) had grown 3.3 per cent in September 2022.
The data released by the National Statistical Office (NSO) showed that the manufacturing sector’s output grew by 4.5 per cent in September 2023.
Mining production rose 11.5 per cent during the month under review. Power output increased 9.9 per cent.
The IIP grew by 6 per cent in April-September 2023 compared to 7.1 per cent growth a year ago.
Aditi Nayar, chief economist and head (research & outreach) at ICRA, said, “An unfavourable base, a shift in the festive calendar and excess rainfall caused the year-on-year (YoY) growth in the Index of Industrial Production (IIP) to nearly halve to a lower-than-expected 5.8 per cent in September 2023 from 10.3 per cent in August 2023.”
She said that while the moderation was broad-based across all sub-sectors and use-based categories, the performance of consumer goods was especially tepid at 1 per cent and 2.7 per cent, respectively, for durables and non-durables, resulting in the manufacturing sector’s performance trailing that of mining and electricity in September 2023.
“Looking ahead, the YoY performance of a majority of the available high-frequency indicators improved in October 2023, relative to September 2023. Consequently, ICRA expects the YoY IIP growth to improve to 7-10 per cent in that month, boosted by a favourable base for some sectors owing to the early onset of the festive season in 2022 and the relatively fewer working days in October 2022. However, we expect fewer working days to dampen IIP growth in November 2023,” Nayar said.
She also said the shift in the festive calendar is likely to muddy YoY comparisons for the next two months as well. Consequently, it would be more meaningful to compare the average YoY growth performance in Oct-Nov 2023 vis-à-vis Oct-Nov 2022.