India's industrial growth, as per the Index of Industrial Production (IIP), rose to 3.1 percent in September, data released on November 11 by the Ministry of Statistics and Programme Implementation showed.
Output had contracted by 0.8 percent in August - the industry's worst performance in 18 months. This figure has now been revised slightly upwards to -0.7 percent.
At 3.1 percent, the latest IIP growth figure is above consensus estimates. A Moneycontrol poll of 14 economists had predicted IIP growth may rise to 2.3 percent in September.
Much of the improvement in industrial growth in September was thanks to the electricity and mining sectors. After growing by a mere 1.4 percent in August, electricity production jumped by 11.6 percent on a year-on-year basis in September.
Meanwhile, mining output increased by 4.6 percent following a contraction of 3.9 percent in August.
The manufacturig sector, however, did not make as much headway. Its output increased by 1.8 percent, whereas in August it had declined by 0.5 percent.
| SEP 2022 | AUG 2022 | SEP 2021 | |
| IIP growth | 3.1% | -0.7% | 4.4% |
| Mining | 4.6% | -3.9% | 8.6% |
| Manufacturing | 1.8% | -0.5% | 4.3% |
| Electricity | 11.6% | 1.4% | 0.9% |
| USE-BASED CLASSIFICATION | |||
| Primary goods | 9.3% | 1.7% | 4.6% |
| Capital goods | 10.3% | 4.3% | 3.3% |
| Intermediate goods | 2.0% | 1.2% | 7.0% |
| Infrastructure goods | 7.4% | 2.1% | 9.3% |
| Consumer durables | -4.5% | -2.5% | 1.6% |
| Consumer non-durables | -7.1% | -9.5% | -0.1% |
In August, output of consumer durables had fallen by 2.5 percent. This worsened to 4.5 percent in September. Meanwhile, non-durable goods saw their production fall by 7.1 percent in September compared to a fall of 9.5 percent in August.
Production of the other four categories of goods - primary, capital, intermediate, infrastructure - all increased at a faster clip in September, with capital goods posting a sharp rise of 10.3 percent.
"The strong growth recorded in capital goods and infrastructure sector is encouraging and is hopefully a precursor to pick up in the capex cycle," noted Rajani Sinha, CareEdge's chief economist.
"However, improvement in domestic consumption demand will be critical for sustained recovery in India's growth momentum. Hence, poor performance of IIP consumer durables and non-durables is worrisome. Going forward, as inflation moderates, we are likely to see a pickup in consumption demand," she added.
On the whole, India's industrial output is up 7 percent on a year-on-year basis for the first half of FY23. In the first half of FY22, a low base meant industrial output was up a massive 23.8 percent.
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