Factory output comes at 4.9% in April 2018; Manufacturing sector grows by 5.20%

India's Industrial Production or factory output came in at 4.9% for the month of April 2018. The indicator recorded a growth rate of 4.4% in March 2018 month, which was surprisingly quite lower compared to growth of 7% in February 2018. IIP has been deceleration after November 2017 where it recorded a growth of 5 year high which indicated that India is surpassing shocks of GST and demonetisation. 

Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 for the month of April 2018 have been released by the Central Statistics Office of the Ministry of Statistics and Programme Implementation. 

source: tradingeconomics.com

The General Index for the month of April 2018 stands at 123.0, which is 4.9% higher as compared to the level in the month of April 2017. 

Cumulative growth for the period April-March 2017-18 over the corresponding period of the previous year stands at 4.3%.

Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of April 2018 stand at 103.8, 123.4 and 153.7 respectively, with the corresponding growth rates of 5.1%, 5.2% and 2.1% as compared to April 2017 (Statement I). The cumulative growth in these three sectors during April-March 2017-18 over the corresponding period of 2016-17 has been 2.3%, 4.5% and 5.4% respectively.

In terms of industries, sixteen out of the twenty three industry groups (as per 2-digit NIC-2008) in the manufacturing sector have shown positive growth during the month of April 2018 as compared to the corresponding month of the previous year.

As per Use-based classification, the growth rates in April 2018 over April 2017 are 3.1% in Primary goods, 13.0% in Capital goods, 1.6% in Intermediate goods and 7.5% in Infrastructure/ Construction Goods.  The Consumer durables and Consumer non-durables have recorded growth of 4.3% and 7.0% respectively.

The industry group ‘Manufacture of computer, electronic and optical products’ has shown the highest positive growth of 27.5% followed by 21.9% in ‘Manufacture of motor vehicles, trailers and semi-trailers’ and 15.7% in ‘Manufacture of food products’. On the other hand, the industry group ‘Other manufacturing’ has shown the highest negative growth of (-) 30.7% followed by (-) 13.4% in ‘Manufacture of wearing apparel’ and (-) 10.3% in ‘Printing and reproduction of recorded media’.

Anagha Deodhar, Research Analysts at ICICI Securities expected Industrial production is likely to grow 6.9% in Apr ’18 up from 4.4% in the previous month and 3.2% in the corresponding month last year. The base effect for IIP also remains unfavourable since between Mar ’17 and Apr ’17, industrial production growth fell from 4.4% to 3.2%.