December IIP growth rises to 3.8%

Growth in India's industrial output edged up to 3.8 percent in December 2023, according to data released by the Ministry of Statistics and Programme Implementation on February 12.

At 3.8 percent, the latest industrial growth figure as per the Index of Industrial Production (IIP) is up from the November 2023 figure of 2.4 percent.

In December 2022, India's industrial output had grown by 5.1 percent.

Meanwhile, for April-December 2023, industrial growth stood at 6.1 percent as against 5.5 percent in April-December 2022.

Industrial growth accelerated in December even though its lead indicator, core sector growth, had slumped to a 14-month low of 3.8 percent in December from 7.8 percent the previous month. The eight core industries make up more than 40 percent of the weight of the IIP. As such, lower core sector growth is usually reflected in weaker IIP growth.

However, industrial growth picked up pace in December as the manufacturing sector's output increased by 3.9 percent after having posted a growth of just 1.2 percent in November.

"Encouraging sequential growth across the mining, manufacturing and electricity sectors has supported growth during the month despite an unfavourable base," said Rajani Sinha, chief economist at CareEdge, noting that improvement in manufacturing output was a "positive aspect".

While manufacturing output expanded at a faster pace in December, that of mining and electricity production cooled to 5.1 percent and 1.2 percent from 7.0 percent and 5.8 percent, respectively.

"The other noteworthy aspect was the rebound seen in consumer durables and non-durables output which grew by 4.8 percent and 2.1 percent, respectively. However, the sustenance of this trend remains critical for industrial activity in the coming months," Sinha added.

In terms of the use-based classification of goods, production growth in December 2023 is as follows:

>> Primary goods: 4.6 percent versus 8.5 percent in November

>> Capital goods: 3.2 percent versus -1.1 percent in November

>> Intermediate goods: 3.4 percent versus 3.1 percent in November

>> Infrastructure goods: 4.1 percent versus 1.7 percent in November

>> Consumer durable goods: 4.8 percent versus -5.5 percent in November

>> Consumer non-durable goods: 2.1 percent versus -3.3 percent in November