IIP numbers for Feb'14 came in much below market expectations and plunged to a nine-month low on the back of poor manufacturing activity and muted consumer demand. The HSBC Manufacturing PMI for Mar'14 dropped to 51.3 from 52.5 in Feb'14 indicating a further stagnation in factory output. Further, weak investment activity, as indicated by the steep fall in capital goods output, and fall in consumer demand for consumer durables and consumer non-durables hints fragile consumer confidence and a dampening outlook for industrial output. In view of the above and a relatively high base, recovery seems rather difficult, and industrial output may continue to remain in the negative zone in the coming month.
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