IIP Data: November 2009 -Index for Industrial production
- The IIP figure for November stood at 11.7%, taking everybody’s breath away. It stunned everybody since the market’s expected figures was hovering around 10%.The same index registered a growth of 2.4% y-o-y in Nov’08 whereas a growth of 10.3% (revised) y-o-y in the last month
- It grew at its fastest pace in two years which was the after-effects of the festive season and also strong global cues. It thus supported the story of improved industrial activity in the last few months and thus, is an indication of a faster economic recovery in India
- This number will help RBI to decide for an increase in the interest-rate. It is likely to withdraw liquidity from the market and very soon pull back the monetary and fiscal stimulus on the excellent performance of the manufacturing and consumer durables segment
- The manufacturing sector grew by 12.7% y-o-y compared to 2.4% in Nov’08 y-o-y on account of increased manufacturing activities. This sector has seen a huge jump in figures, the reasons being increase in factory outputs and increase in steel consumption by 8% during the first 9 months of the current fiscal. Manufacturing grew by 11.1% in the same month of the last year
- The electricity sector increased to 3.3% from 3.1% in Nov’08 y-o-y. It grew by 4.7% respectively in Nov’09. the numbers posted in this sector are very fluctuating and they have a volatility of 3-4%
- The mining sector, posted a growth of 10.0% against 0.5% in the same month of the last year. It grew by 8.2% in Nov’09 y-o-y. It has been consistently showing good performance since the last few months and is expected to continue this trend
- In the use-based category the basic goods, capital goods and the intermediate goods sector registered a growth of 6.0%, 12.2% and 19.4% y-o-y respectively compared to 2.3%, -2.3% and 2.6% y-o-y respectively in Nov’08. The growth in the basic goods doesn’t seem to be constant while the capital goods was driven by an increased demand from the industries
- The consumer goods sector has grown by a satisfactory 11.1% y-o-y compared to its growth of 4.4% in Nov’08 y-o-y. The sector’s growth was driven by a boost in the consumer durables segment which grew by 37.3% y-o-y, a huge increase from -4.2% in Nov’08 y-o-y. Increased demand in automobiles, strong consumption pattern and surge in demand of other durable products led to a significant increase in it. It was the consumer non-durable goods which did not perform well, registering a growth of 3.1% compared to a growth of 7.3% in Nov’08
Author: Rahul Sonthalia, Analyst, Kredent Group
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