India's February IIP grows at 5.7% from 3.8% a month back

IIP is seen as a lead indicator of industrial growth data.

Growth in India's industrial output accelerated to 5.7 percent in February, according to data released by the Ministry of Statistics and Programme Implementation on April 12.

At 5.7 percent, the latest industrial growth figure as per the Index of Industrial Production (IIP) is higher from the January 2023 figure of 3.8 percent.

The eight core industries – coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity – make up around 40 percent of the IIP. As such, it is seen as a lead indicator of industrial growth data.

The data was quite mixed, ranging from a contraction of 3.8 percent in consumer non-durables and a double-digit expansion of 12.3% in consumer durables in February 2024.

The IIP during the April 2023-February 2024 grew at 5.9 per cent as compared to 5.6 per cent in the corresponding period previous year.

The IIP saw a rise in February on account of mining production which increased to 8 per cent while the power output increased to 7.5 per cent.

The manufacturing sector's output slowed to 5 percent in February as compared to 5.9 percent in the same month a year ago, the data released by the National Statistical Office (NSO) showed.

In terms of the use-based classification of goods, production growth in February was as follows:

>> Primary goods rose at 5.9 percent

>> Capital goods increased at 1.2 percent

>> Intermediate goods increased at 9.5 percent

>> Infrastructure goods rose to 8.5 percent

>> Consumer durable rose to 12.3 percent

>> Consumer non-durable goods fell to 3.8 percent

Aditi Nayar, Chief Economist, ICRA said, "The industrial growth in February 2024 rose to 5.7 percent, nearly in line with our expectations (+6.0 percent), partly benefitting from the extra day in the leap month. The YoY performance of most available high frequency indicators deteriorated in March 2024 vs. February 2024, such as Coal India's output and steel consumption, indicating that growth in economic activity is likely to have softened in the month."