Industrial Production Up By 3.4%, Backed By Growth In Mining And Electricity Sectors

The estimates of Index of Industrial Production (IIP), for the month of April 2019, stands at 126.8, which is 3.4% higher as compared to the level in the month of April 2018. When it comes to cumulative growth for the period April-March 2018-19 against corresponding period of the previous year, it stood at 3.6%. The indices of industrial production for the mining, manufacturing and electricity sectors for the month of April 2019 came at 107.8, 126.6 and 162.9 respectively, showed the data. Whereas, their corresponding growth rates were 5.1%, 2.8% and 6.0% as compared to April 2018.

Commenting on the development Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI said, “Industrial Production growth for Apr’19, surpassing expectations of de-growth, accelerated to 3.4% y-o-y (Apr’18: 4.5% y-oy). Impetus was given by the mining and electricity sectors, which displayed growth rates of 5.1% and 6.0% respectively. With the Q4GDP numbers a disappointment, we have to see if this IIP growth is temporary or not.”

That said, 14 out of 23 industry groups under the manufacturing sector have shown positive growth in April 2019 as compared to the corresponding month of the previous year. The industry group ‘manufacture of wearing apparel’ has shown the highest positive growth of 33.6% followed by 22.6% in ‘Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials’ and 16.3% in ‘Printing and reproduction of recorded media’.

Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares & Stock Brokers said, “IIP growth came ahead of expectations. But given the inherent volatility of monthly numbers, this substantially does not change the subdued outlook for H1FY20. We think government would continue to focus on growth through different measures including tax cuts and increased welfare related spending. RBI too would maintain accommodative liquidity and interest policy stance.” Whereas on the other hand, the industry group ‘manufacture of paper and paper products’ marked the highest negative growth of -12.3% followed by -9.6% in ‘Manufacture of fabricated metal products, except machinery and equipment’ and -3.5% in ‘manufacture of other transport equipment’.