India's industrial output expanded at the fastest pace in over a year.
The Index of Industrial Production grew 10.3% in August, as compared with a revised growth of 6% in July, according to data published by the Ministry of Statistics and Programme Implementation on Thursday.
Thirty-six economists polled by Bloomberg had forecast August IIP growth at 9.1%.
On a month-on-month basis, the index advanced by 1.8%.
Sectoral Estimates (YoY)
Mining output grew 12.3% as compared with 10.6% in July.
Manufacturing output expanded by 9.3% as against 5%.
Electricity generation rose 15.3% as compared with 8%.
Industrial output, as classified by the end use of goods, showed:
Primary goods output rose 12.4% in August as compared with 7.6% in July.
Capital goods output grew 12.6% as compared with 4.5%.
Intermediate goods output rose 6.5% as compared with 2.4%.
Infrastructure and construction goods output rose 14.9% as compared with 12.4%.
Consumer durables output rose 5.7% as compared with a decline of 2.6%.
Consumer non-durables output grew 9.0% as against 7.9%.
The major growth drivers in the manufacturing sector were higher production of metals (steel), mineral products (cement) and transport equipment, said Suman Chowdhury, chief economist at Acuite Ratings.
The mining sector has possibly benefitted from the rainfall deficiency in August, with power demand also coming in sharply higher, Chowdhury said. Typically, the electricity sector witnesses a decline in generation during the monsoon months given the irregular rainfall.
The stocking requirements during the festive season may have given a boost to consumer goods production, he said.
Cumulatively, IIP has grown by a healthy 6.1% YoY in the first five months of the fiscal, which reflects a significant pick-up in industrial activity. "We expect IIP to maintain such a trend for FY24 as a whole, although the base factor will not remain as favourable in the second half of the year,” said Chowdhury.
A shift in the festival calendar may provide an optical boost to the growth of certain categories within the IIP in the months of September and November, with a concomitant moderation in the prints for October, said Aditi Nayar, chief economist at ICRA.
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