October IIP soars to 8.2%, beats estimates

Manufacturing sector grew by 9.6% as against -6% y-o-y

Industrial production growth rate bounced back to a 16-month high of 8.2% in October on good performance of the manufacturing, power sector and higher output of capital as well as consumer goods, indicating sudden recovery in the economy.

The factory output, as measured by the Index of Industrial Production (IIP), contracted by 5% in October last year. The IIP had expanded by 9.5% in June 2011.

Industrial output growth in the April-October period this fiscal, however, was 1.2%, less than 3.6% in the same period in 2011-12, according to the official data released here today.

Meanwhile, the contraction in the industrial production during September this year was revised downward to 0.7%% from earlier provisional estimates of 0.4% released last month.     

The manufacturing sector, which constitutes over 75% of the index, grew by robust 9.6% in October, as against a contraction of 6% in same month last year.     

However, the output of the key sector remained low at one% in April-October this year as against 3.8% growth in the same period in 2011-12.     

Capital goods output also shown remarkable improvement as it grew by 7.5% in October, as against a massive contraction of 26.5% in October 2011.     

However, output of capital goods contracted in the April-October period by 11.4%, as against a dip in production by 0.5% in the 2011-12 period.     

Power generation grew by 5.5% in October compared 5.6% same month last year. The electricity generation in the April-October period is 4.7% against 8.9% in a year-ago period.

Another segment which performed well is consumer goods as its output registered a double-digit growth of 13.2% in October against a meagre 0.1% growth year ago.

In April-October period of this fiscal, the growth in the consumer goods segment remained flat at 4%.

However, mining output in October contracted by 0.1% compared to a decline in production by 5.9% in same month last year. The sector's production in April-October also declined by 0.7%, against a contraction of 2.2% in the year-ago period.

In terms of industries, 17 out of the 22 industry groups in the manufacturing sector have shown positive growth during October 2012 compared to the corresponding month of the previous year.    

Consumer durables is another segment which showed smart recovery by registering a growth in production by 16.5% in October, compared to a contraction of 0.4% in the same month last year.

The output of these goods registered a growth of 5.6% during April-October, as against 4.5% in the same period last fiscal.

The consumer non-durables output growth also remained in double digit at 10.1% in October, as against a meagre 0.5% growth in the same month last year. This segment grew by 2.7% in the seven month period of this fiscal, as against 3.6% in the same period of 2011-12.

The basic goods production growth also improved to 4.1% in October, compared to 1.2% the year-ago period.    

During the April-October period, this segment recorded a growth of 3%, compared to 6.3% in the first seven months of last fiscal.     The increase in IIP numbers would ease pressure on RBI to lower interest rates amid high inflation. The retain inflation in November rose to 9.90% from 9.75% in October.