India's factory output in November rose at a modest pace over a year ago despite a favourable base effect. Output fell compared to the preceding month.
The Index of Industrial Production rose 1.4% over a year earlier compared with an increase of 4% in October, as per revised estimates. On a month-on-month basis, the index fell 4.7% in November as against a 5.1% sequential rise in October, the estimates showed.
As many as 29 economists polled by Bloomberg had forecast November IIP growth at 2.8%.
Sectoral Estimates (Year-On-Year)
Mining output rose 5% in November over a year ago compared to a rise of 11.5% in October.
Manufacturing output rose 0.8% in November after a rise of 3.1% in October.
Electricity generation rose 2.1% from an year ago. It rose by 3.1% in October.
Industrial output, as classified by the end-use of goods, showed a decline in some industries while others advanced.
Primary goods output rose 3.5% year-on-year compared to 9% a month ago.
Capital goods output fell by 3.7% after a decline of 1.5% in the previous month.
Intermediate goods output rose by 2.5% annually after a rise of 3.8% in October.
Infrastructure and construction goods output rose 3.8% compared to a rise of 6.6% in October.
Consumer durables output was 5.6% lower than an year ago. It was lower by 3.6% in the previous month.
Consumer non-durables output was 0.8% higher than a year ago. It had risen a similar amount in October.
The moderation in industrial output reflects the impact of slackening momentum after the festive season compounded by the disruption caused by heavy rains in South India, said Aditi Nayar, chief economist at ICRA. The continuing issues afflicting the auto sector added to the weakness.
The dip in industrial growth was broad-based across the three sectors and six categories, with capital goods and consumer durables displaying an even deeper year-on-year contraction in November 2021.Aditi Nayar, Chief Economist, ICRA
The economy is still in the midst of both anaemic investment and consumer demand, said Sunil Kumar Sinha, principal economist at India Ratings & Research. This can be inferred from the fact that both capital and consumer durable goods, despite a favourable base, recorded a degrowth of 3.7% and 5.6% respectively in November 2021, Sinha said.
He added that the index levels in November has once again fallen below pre-Covid levels.
Worryingly, all the sectors were below the pre-Covid level (February 2020) in November 2021. As a result, overall IIP was still 95.8% of the pre-Covid level.Sunil Kumar Sinha, Principal Economist, India Ratings & Research
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