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Surprise uptick in Jan IIP numbers: Aditya Birla Money

Aditya Birla Money has come out with its report on Index of Industrial Production (IIP) January 2012. According to the research firm the manufacturing sector which constitutes around 76% to industrial production has shown a strong rate of growth compared to previous year.

March 13, 2012 / 05:14 PM IST

Aditya Birla Money has come out with its report on Index of Industrial Production (IIP) January 2012. According to the research firm the manufacturing sector which constitutes around 76% to industrial production has shown a strong rate of growth compared to previous year.


The Index of Industrial Production (IIP) for the month of January 2012 recorded a growth of 6.80 per cent compared to 2.50 per cent in the month of December, 2011. This is quite higher than the market expectations of 2.10 per cent The IIP has indicated a growth of 7.50 per cent in January 2011. The Indices for the Mining, Manufacturing and Electricity sectors saw growth rates of (-) 2.70 per cent, 8.50 per cent and 3.20 per cent as compared to January 2011. The mining sector has shown negative rate of growth for sixth consecutive month reflecting the problems faced by the sector in regulatory and environmental approvals. The manufacturing sector which constitutes around 76% to industrial production has shown a strong rate of growth compared to previous year.


Consumer Goods and Consumer non-durables has shown very strong growth of 20.2 per cent and 42.1 per cent respectively, up from 10.2 per cent 14.0 per cent in the previous month. Food and beverages, a constituent of consumer non-durable, grew at 92 per cent year-on-year for the month of January 2012 and was responsible for strong growth in consumer non- durables. On the other hand consumer durables has shown a decline of -6.8 per cent down from 4.9 per cent in the previous month


Surprisingly the IIP number has shown better than expected growth. While strong growth in manufacturing shows strength in the economy the growth seems to be skewed towards a few sectors like consumer goods and consumer non-durables while sectors like consumer durables, capital goods and mining has shown negative growth. It is likely that this surge may not be maintained in the immediate term. Therefore, it may not be of any major import for policy making including the RBI stance for the upcoming monetary policy.


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