India’s factory output soars to a 25-month high in November

India’s industrial output hit a 25-month in November, soaring 8.4 percent led by robust growth in manufacturing, as well as inventory rebuilding after the festive season.

Factory output measured by the index of industrial production (IIP) is the closest approximation for measuring economic activity in the country’s business landscape. It had hit a three-month low of 2.2 percent a month ago and grew at 5.1 percent in December, 2016.

Manufacturing sector, which accounts for more than three-fourths of the entire index, grew 10.2 percent in November, compared with 2.5 percent growth in October, and 4.8 percent in November 2016, government data showed.

Capital goods output, which is a proxy to measure private sector investment activity, rose 9.8  percent in November compared with 6.8 percent in October.

Consumer durables output grew 2.9 percent in November, against a contraction of (- 6.9 percent) in the month before, indicating a revival in demand. In the same month last year, growth was 1.5 percent.

Consumer non-durables shot up 23.1 percent in December as compared with a growth of 3.3 percent a year ago.

“The disaggregated data poses a mixed trend with high growth in consumer non- durables, construction goods and capital goods offset by modest expansion in basic goods, intermediate goods and consumer durables. Nevertheless, all the six sub-sectors recorded an improving trend on a sequential basis, which is encouraging,” Aditi Nayar, Principal Economist at ICRA said.

Construction goods grew the highest in nearly five years at 13.5 percent in December aided by expansion in steel and cement output

Electricity production grew 3.9 percent in November as compared with 3.2 percent in October. Mining production grew 1.1 percent in November from a subdued growth of 0.2 percent a month ago.