India's factory output jumps to 5.2% in January
11 Mar 2023 11:13:04
New Delhi, Mar 11: India's industrial production index (IIP) jumps to 5.2% in January 2023, better than the street's expectations. The factory output made a significant rise from 4.3% print in the previous month. In January last year, IIP stood at 2%.
As per the Ministry of Statistics & Programme Implementation, in January 2023, the quick estimates of IIP with base 2011-12 stood at 146.5. While the indicators of IIP such as the Mining, Manufacturing, and Electricity sectors in January 2023 stood at 135.9, 144.3, and 186.6 respectively.
As per Trading Economics, the latest reading in IIP is higher than the market forecasts of 5%. Further, the ministry data showed that indices stand at 149.6 for Primary Goods, 105.3 for Capital Goods, 153.6 for Intermediate Goods, and 171.7 for Infrastructure/ Construction Goods in January 2023. Also, the indices for Consumer durables and Consumer non-durables stand at 109.6 and 164.0 respectively in January 2023. On a month-on-month basis, electricity and manufacturing output lifted the overall IIP. In January 2023, the mining growth stood at 8.8% versus 9.8% in December 2022, while the manufacturing output stood at 3.7% versus 2.6% and electricity growth came in at 12.7% versus 10.4%. Aditi Nayar, Chief Economist and Head - Research & Outreach, ICRA Ltd on IIP data said, “The moderate IIP growth of 5.2% for January 2023 printed in line with our expectations (5.6%), with a healthy performance of primary, capital and infra goods and consumer non-durables offsetting the marginal rise in intermediate goods and discouraging contraction in consumer durables. A portion of the continuing, albeit narrower contraction in consumer durables, stems from weak exports." She added, encouragingly, the IIP growth of 5.2% for January 2023 recorded an uptick both in sequential terms (+4.7% in Dec 2022), as well as compared to the tepid average of 2.6% for Q3 FY2023, and stood at the second highest level since July 2022. Despite the subdued base related to the third wave of Covid-19, some of the available high-frequency indicators recorded a weaker YoY performance in February 2023, relative to January 2023, such as Coal India Limited’s output, rail freight traffic, ports cargo traffic, electricity generation, and auto output. In contrast, Nayar said, "vehicle registrations and finished steel consumption witnessed an improved YoY performance in February 2023, relative to the previous month. Based on these trends, we expect the IIP to record a dip in the YoY growth to 3-5% in February 2023."
The ministry said, along with the quick estimates of IIP for January 2023, the indices for December 2022 have undergone the first revision and those for October 2022 have undergone the final revision in the light of the updated data received from the source agencies. As per the ministry, the quick estimates for January 2023, the first revision for December 2022, and the final revision for October 2022 have been compiled at weighted response rates of 90%, 95%, and 95% respectively. The IIP data for February will be released on Wednesday, April 12th.