IIP growth reaches 12-month high of 19.6% in May

The growth was pegged at 6.7% in April

July 13, 2022

The growth in the Index of Industrial Production (IIP) was at 18.1% and exceeded the core infrastructure sector’s growth for the first time in eight months

The overall IIP has also increased by 6.3% from the pre-Covid levels

Capital goods grew by 54%, and consumer durables rose by 58.5%

Manufacturing grew at 20.6%, mining grew by 10.9%, and electricity increased by 23.5%

India’s industrial output growth witnessed a year-high of 19.6% in May, compared to the same month last year. The growth was pegged at 6.7%, in the previous month. This signifies that economic activity continued to increase despite growing input costs due to the Russia-Ukraine conflict

On a seasonally-adjusted sequential basis, the Index of Industrial Production (IIP) grew by 1% month-on-month basis in May. It grew at 4.6% in April.

According to official data, manufacturing grew at 20.6% in May compared to 5.8% in April. Mining grew by 10.9%, and electricity increased by 23.5%. 

Capital goods grew by 54% and consumer durables rose by 58.5%. Both segments witnessed their growth at the fastest pace since May 2021. The latest growth suggests a rise in investments and urban consumption. On the other hand, the growth in the non-durables segment stood at 0.9%, which was positive for the first time in three months. This is expected to improve on the back of a bumper farm harvest.

The growth in the IIP was at 18.1% and exceeded the core infrastructure sector’s growth for the first time in eight months, during May. The overall IIP has also increased by 6.3% from the pre-Covid levels of May 2019.

Analysts are expecting the IIP’s growth to be pegged at 10-13% in June. They mentioned that the capital goods segment has seen double-digit growth by apparently benefiting from the Capex push provided by the government. The consumer durables segment is gaining from summer demand.