India's industrial output, as per the Index of Industrial Production (IIP), crashed by 4 percent in October, data released on December 12 by the Ministry of Statistics and Programme Implementation showed.
With the output having increased by 3.5 percent in September, the latest figure shows industry growth returned to sub-zero territory after a gap of just one month.
Industrial production had shrunk by 0.7 percent in August.
The fall in IIP in October is well below the consensus estimates. A Moneycontrol poll had predicted IIP may shrink by 0.4 percent in October.
This is the worst performance of the Indian industry in over two years.
| OCT 2022 | SEP 2022 | OCT 2021 | |
| IIP growth | -4% | 3.1% | 4.2% |
| Mining | 2.5% | 4.6% | 11.5% |
| Manufacturing | -5.6% | 1.8% | 3.3% |
| Electricity | 1.2% | 11.6% | 3.1% |
| USE-BASED CLASSIFICATION | |||
| Primary goods | 2.0% | 9.3% | 9.0% |
| Capital goods | -2.3% | 10.3% | -1.6% |
| Intermediate goods | -2.8% | 2.0% | 4.6% |
| Infrastructure goods | 1.0% | 7.4% | 6.6% |
| Consumer durables | -15.3% | -4.5% | -3.2% |
| Consumer non-durables | -13.4% | -7.1% | 0.7% |
"While the IIP posted a deeper-than-expected contraction, mirroring the anemic performance of exports, this chiefly reflects holidays during the festive period," noted Aditi Nayar, ICRA's chief economist.
Manufacturing was the worst performing sector in October, with its output contracting by 5.6 percent. Mining and electricity, meanwhile, expanded by 2.5 percent and 1.2 percent, respectively.
Going by use-based classification, the production of four of the six goods contracted on a year-on-year basis in October. Consumer durables and non-durables fared the worst, with their output shrinking by double digits.
According to ICRA's Nayar, high-frequency data shows economic activity improved in November.
"...we believe that an average performance of October and November would provide a better gauge of the actual growth momentum and demand dynamics," Nayar added.
For April-October 2022, India's industrial output is up 5.3 percent on a year-on-year basis, down from 20.5 percent in the first seven months of FY22.
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