India’s IIP up by 5.7% in July 2023

Index of Industrial Production (IIP) for July 2022 stood at a modest 2.2%

September 13, 2023

The mining sector experienced a substantial improvement, with output in July 2023 increasing by 10.7%

The manufacturing sector demonstrated resilience, with a growth rate of 4.6% in July 2023

Electricity production also exhibited notable growth, with an 8 % increase in July 2023

The capital goods segment posted a growth of 4.6% in July 2023

India’s industrial production showed robust growth in July 2023, surging by 5.7%, a significant increase from the 3.7% recorded in June 2023, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI). In contrast, the IIP for July 2022 stood at a more modest 2.2%.

The mining sector experienced a substantial improvement, with output in July 2023 increasing by 10.7 %, a significant turnaround from the negative growth of -3.3% in the same period the previous year.

Meanwhile, the manufacturing sector demonstrated resilience, with a growth rate of 4.6% in July 2023 compared to 3.1% in July 2022.

Electricity production also exhibited notable growth, with an 8 % increase in July 2023 compared to 2.3% in July 2022.

Looking at use-based classification, the capital goods segment posted a growth of 4.6% in July 2023, slightly lower than the 5.1% recorded a year ago. Consumer durables output remained stable, declining by 2.7%, the same as the year-ago period, while consumer non-durables output registered a healthy growth of 7.4%. Infrastructure and construction goods experienced a remarkable surge, with an 11.4% increase compared to 4.8% growth in the corresponding period of the previous year.

Further analysis of the data revealed that primary goods output grew by 7.6% in July, a significant improvement from the 2.5% growth in the same period the previous year. Intermediate goods output increased by 1.9% in July, slightly below the 3.7% growth observed in the corresponding month of the last year.

For the April-July fiscal year 2023-24, the IIP growth rate averaged 4.8%, down from the 10.0% recorded in the same period the previous year.

Experts noted that the industrial production growth of 5.7% in July was broadly in line with expectations. Manufacturing, which holds a significant 77.6% weight in industrial production, improved to 4.6% from the previous month’s 3.1%. They also pointed out that the Purchasing Managers Index (PMI) for manufacturing, reaching a three-month high of 58.6 in August, suggests improved prospects for future IIP growth. However, they cautioned that the strength of industrial production in the coming months could be influenced by external factors, especially the expected global economic slowdown in the year’s second half.

Source: Economic Times

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