IIP Data for January 2010
The IIP figure for Jan’10 grew at 16.7% compared to -0.5% in Jan’09 on a y-o-y basis. The same index
registered a growth of 17.6% (revised) in the last month yoy. The figure was not surprising as it was in
line with the market’s expectation
- In terms of industries as many as 14 out of 17 industries have shown positive growth during the monthof Jan’10. The government is unlikely to hike the interest-rate before the policy review in April’10, afterRBI deputy governor said that it was premature to take any mid-term policy action
- The IIP numbers are expected to continue flowing in double-digits on a yoy basis for several moremonths given the base effect and strong Purchasing Manager’s Index number. According to a survey,the business activities among Indian service companies grew at its fastest pace in 17 months inFebruary, climbing for the third straight month as both output and new orders increased
- The mining sector showed a huge jump from 9.5% in Dec’09 to 14.6% in Jan’10. It registered a growthof -0.4% in Jan’09 y-o-y. The performance has tremendously improved in this segment giving a surge inthe overall IIP growth. This robust growth has come after a long gap since August’09
- The manufacturing sector grew by 17.9% in Jan’10 compared to 18.5% in the last month on a y-o-ybasis. This sector has been consistently showing improvement and has registered growth in doubledigits since last 5-6 months. It registered a growth of -0.8% in Jan’09
- The electricity sector registered a growth of 5.6% in Jan’10 y-o-y compared to 5.4% in Jan’09 y-o-y. Ithas continued its uprising trend since last few months and had registered an increase of 1.8% in thecorresponding month of the last year
- In the use-based category the basic goods, capital goods and the intermediate goods sector registereda growth of 10.7%, 56.2% and 21.3% y-o-y respectively compared to -1.0%, 15.4%, -9.2% y-o-yrespectively in Jan’09. All the three sectors have performed extremely well; especially the capital goodswhich has showed a huge improvement due to rise in demand of industrial equipments by the industries
- The consumer goods sector has shown a decline and grew by 4.2% y-o-y compared to its growth by12% in Dec’09 y-o-y. The reason for this was the decline in the growth of consumer durables whichgrew by 31.6% compared to 46.0% in Dec’09. There was a decrease in the demand for the goods dueto soaring inflation which led to an increase in the price of the goods. The non-durable goods on theother hand rose by -3.1% which was less compared to the last month’s growth of 3.7%
Author: Rahul Sonthalia, Analyst, Kredent Group
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