IIP growth boosted to 7.5% on courtesy in manufacturing, capital, consumer goods

Index of Industrial Production (IIP) or factory output for the month of January 2018 jumped by 7.5% - higher compared to previous month in December 2017 where it stood at 7.1%, however the indicator was lower compared to 5-year mark of 8.8% in the month of November 2017.  The Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 for the month of January 2018 have been released by the Central Statistics Office (CSO)  of the Ministry of Statistics and Programme Implementation.

CSO stated that, the General Index for the month of January 2018 stands at 132.3, which is 7.5% higher as compared to the level in the month of January 2017. Cumulative growth of IIP from April 2017 - January 2018, over corresponding period  of the previous year stands at 4.1%.

source: tradingeconomics.com

Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of January 2018 stand at 114.5, 133.8 and 149.5 respectively, with the corresponding growth rates of 0.1%, 8.7% and 7.6% as compared to January 2017.

The cumulative growth in the above mentioned three sectors during April-January 2017-18 over the corresponding period of 2016-17 has been 2.5%, 4.3% and 5.3% respectively.

16 out of the 23 industry groups (asper 2-digit NIC-2008) in the manufacturing sector have shown positive growth during the month of January 2018 as compared to the corresponding month of the previous year. 

Industry group ‘Manufacture of other transport equipment’ has shown the highest positive growth of 33.1% followed by 27.8% in ‘Manufacture of furniture’ and 26.6% in ‘Manufacture of  motor vehicles, trailers and semi-trailers’. 

On the other hand, the industry group ‘Manufacture of tobacco products’ has shown the highest negative growth of (-) 46.5% followed by (-) 32.4% in ‘Other manufacturing’ and (-) 13.2% in ‘Printing and reproduction of recorded media’.

As per Use-based classification, the growth rates in January 2018 over January 2017 are 5.8% in Primary goods, 14.6% in Capital goods, 4.9% in Intermediate goods and 6.8% in Infrastructure/ Construction Goods. 

The Consumer durables and Consumer non-durables have recorded growth of 8.0percent and 10.5% respectively.

Along with the Quick Estimates of IIP for the month of January 2018, the indices for December 2017 have undergone the first revision and those for October 2017 have undergone the final revision in the light of the updated data received from the source agencies, as per CSO. 

The performance of IIP comes surprising, as analysts had predicted much lower growth rate for January 2018. 

Stewart Mackertich expected IIP for January 2018 month to come in at 6.40%. 

 In Nirmal Bang's views, " IIP is likely to come in at 6.7% YoY for January 2018, slightly lower than 7.1% in the previous month. The Manufacturing PMI moderated to 52.7 in January 2018, from 54.7 in the previous month."