Cumulative IIP growth for the period of April 2017-February 2018 over the corresponding period of the previous year stands at 4.3 percent
Aided by robust manufacturing output, India’s industrial production grew 7.1 per cent in February, as compared to 7.4 per cent in January, data released by statistics office showed.
The factory output index grew 7.1 per cent in December and 8.4 per cent in November, last year.
Factory output measured by the index of industrial production (IIP) is the closest approximation for measuring economic activity in the country’s business landscape.
Cumulative IIP growth for the period of April 2017-February 2018 over the corresponding period of the previous year stands at 4.3 per cent.
Manufacturing sector, which accounts for more than three-fourths of the entire index, came in flat at 8.7 per cent in February as compared to 8.7 per cent in January and 0.7 percent a year ago.
According to an economist, the healthy data is an outcome of strengthening domestic demand and a build-up in global trade activity.
“The enhanced manufacturing position has also been reflected in improved consumption demand, upswing in vehicle sales, cement and diesel production,” Richa Gupta, senior economist and Senior Director at Deloitte India, said.
Capital goods output, which is a proxy to measure private sector investment activity, soared 20 per cent in February compared with 14.6 per cent in January.
“The robust 20 expansion in capital goods output was primarily driven by separators, trucks, ship building and commercial vehicles, which together account for less than 20 per cent of the capital goods sub-index. While the growth of capital goods output has surged in the recent months, the YTD growth remains moderate at 5.3 per cent. In our view, recovery in investment activity remains limited to certain sectors,” Aditi Nayar, Principal Economist ICRA, said.
Consumer durables output increased at 7.9 per cent in February as compared to 8 per cent growth in January and de-growth of 4.6 percent in February 2017, while consumer non-durables grew 7.4 per cent in February from 10.5 per cent jump a month ago.
“While remaining robust, the pace of growth of consumer non-durables weakened for the third month in a row. However, both consumer durables and non-durables posted a growth in excess of 7 per cent in February, signalling that the underlying consumer demand in the economy remains healthy,” Nayar said.
Electricity production grew 4.5 per cent in February, as compared 7.6 per cent growth in January and 1.2 per cent a year ago.
Mining activity’s growth further plummeted (-) 0.3 per cent in February, indicating falling coal production. In January, the growth was 0.1 per cent, as compared with a jump of 1.2 per cent a year ago.