IIP: Industrial Output Rises 3.1% In September

The Index of industrial production rose in September after having contracted the previous month.

<div class="paragraphs"><p>(Source:  Anirudh/Unsplash)</p></div>
(Source: Anirudh/Unsplash)

India’s factory output rose in September after having contracted the previous month.

The Index of Industrial Production grew 3.1% in September compared with a contraction of 0.7% in August, according to data published by the Ministry of Statistics and Programme Implementation on Friday.

The industrial output rose by 1.5% on a month-on-month basis in September.

Twenty-eight economists polled by Bloomberg had forecast September IIP growth at 2%.

Industrial output rebounded to a welcome-albeit-lacklustre growth of 3.1% in September 2022, from the unexpected contraction in August 2022, amid a year-on-year contraction in consumer goods and weak export demand, said Aditi Nayar, chief economist at ICRA.  

Relative to the pre-Covid levels, the IIP reported a healthy 8.6% expansion in September 2022, with a rise in all the categories, except consumer non-durables. 

However, the annual growth of most available high frequency indicators eased in October 2022 relative to September 2022, owing to the relatively early onset of the festive season in 2022 vis-à-vis 2021 and the consequent pre-festive stocking and shift in the holiday calendar, Nayar said.

"We expect the overall IIP growth to ease to sub-2% in October 2022, as a higher number of holidays in October 2022 relative to October 2021 owing to the earlier onset of the festive season and flagging external demand are likely to have constrained the performance of the manufacturing sector in the month," said Nayar.

Sectoral Estimates

  • Mining output rose 4.6% in September compared to a contraction of 3.9% in August.

  • Manufacturing output rose 1.8% compared to a contraction of 0.5%.

  • Electricity generation rose 11.6% in September, compared to a growth in 1.4% in August.

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

  • Primary goods output rose 9.3% in September, compared to a rise of 1.7% in August.

  • Capital goods output grew 10.3%, compared to a rise of 4.3% in the previous month.

  • Intermediate goods output rose 2%, compared to a rise of 1.3% in the preceding month.

  • Infrastructure and construction goods output rose 7.4%, compared to a rise of 2.1% in August.

  • Consumer durables output declined 4.5% after declining 2.5% in August.

  • Consumer non-durables output declined 7.1%, compared to a decline of 9.5% in August.

In terms of the use-based categories, growth improved for primary, capital, infrastructure and intermediate goods in September 2022 relative to the previous month, while consumer non-durables reported a narrower contraction and the fall in growth in consumer durables deepened, Nayar said.