IIP: Growth In India's Industrial Output Falls To Eight-Month Low At 2.4%

India's industrial output saw muted growth in November after rising to a 16-month high in the previous month.

The Index of Industrial Production grew 2.4% in November, as compared with a revised growth of 11.6% in October, according to data published by the Ministry of Statistics and Programme Implementation on Friday.

Economists polled by Bloomberg had forecasted November IIP growth at 3.5%.

IIP growth decelerated sharply from the previous month, primarily on account of a normalising base, said Rajani Sinha, chief economist at CareEdge Ratings.

A durable and broad-based improvement in consumption demand is a key monitorable. It remains to be seen if the pre-election spending can provide the much-needed impetus to rural demand, Sinha said.

"On the external front, though the global economy has remained largely resilient in the face of several headwinds, we maintain a cautious outlook amid weakness in exports. Given this background, a durable recovery in domestic demand remains critical for the trajectory of industrial activity going ahead.”

• Mining output grew by 6.8%.

• Manufacturing output expanded by 1.2%.

• Electricity generation rose by 5.8%.

Industrial output, as classified by the end use of goods, showed:

• Primary goods output rose 8.4%.

• Capital goods output fell 1.1%.

• Intermediate goods output rose 3.5%.

• Infrastructure and construction goods output rose 1.5%.

• Consumer durables output fell 5.4%.

• Consumer non-durables output fell 3.6%.

Within the use-based components, the concerning aspect is the continued weakness seen in consumer goods component and the sharp deceleration in infra-related segment, along with the contraction witnessed in capital goods output, said Sinha. "Going ahead, we expect growth numbers in the coming months to be impacted by a further normalisation of the base."