Money Bol » industrial production

March IIP Update

Praveen Bajaj — Fri, 14 May 2010 15:34:54 +0000

The IIP registered a growth of 13.5% for the month of March’10. The same index registered a growth of 2.3% y-o-y in Mar’09 and a growth of 15.1% in the month of Feb’10

The IIP figure once again registered a growth below the street expectation of 15.1%, weighed down by a partial withdrawal of stimulus measures ad a rate-hike. But still, the IIP figure has registered a double digit growth for the sixth consecutive month driven by low base year effect and astounding performance of the manufacturing sector

The central bank is not expected to tighten the monetary policy so soon as it is going to wait for further cues on inflationary pressures and demand in the economy. The overall economic situation in the coming days will give a further insight and help both the government and the RBI to take the appropriate decision on the interest-rate hike

The mining sector leaped ahead with a big jump from 0.4% in Mar’09 to 11.0% in Mar’10 on a yoy basis while the electricity sector showed improvement from 6.3% to 7.7% in Mar’10. The mining and the electricity sector showed a growth of 12.2% and 6.7% in the last month respectively

The manufacturing sector grew by 14.3% y-o-y compared to -3.3% in Mar’09 y-o-y. It has been in an uptrend since few months and has also been one of the factors in helping the IIP soar. It registered a growth of 16.0% in the last month

In the use-based category the basic goods, capital goods and the intermediate goods sector registered a growth of 10.1%, 27.4% and12.7% y-o-y respectively compared to 1.4%, -8.2% and -4.4% y-o-y respectively in Mar’09. These sectors have performed moderately on a mom basis except the capital goods sector which reduced by almost 50%

The consumer goods sector has one again given a good performance registering a growth of 10.6% yo- y compared to its growth by -0.8% in Mar’09 y-o-y. The sector’s growth got injected by a boost in the consumer durables segment which grew by 32.0% y-o-y, a huge increase from 8.3% in Mar’09 y-o-y. The consumer non-durable goods too performed well registering a growth of 3.3% compared to a growth of -3.6% in Mar’09

IIP Data for January 2010

Praveen Bajaj — Mon, 15 Mar 2010 03:35:30 +0000

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

IIP Data: October 2009 -Index for Industrial production

Praveen Bajaj — Sat, 12 Dec 2009 05:26:12 +0000

The IIP figure for October stood at 10.3%, disappointing everybody since the expected figure was hovering around 12%.The same index registered a growth of -0.4% y-o-y in Oct’08 whereas a growth of 9.6% (revised) y-o-y in the last month

The figure was below the market expectations, leading to a fall of 50.41 points in the Sensex, pulling it down from 17,189.31 to 17,138.90, just after the release of the data. Since the market was expecting a better number, all the gaining sectors lost their momentum and took a back step

The figure will also help RBI for the interest-rate decision for January. But, the figures are still not bad for they have again hit a double-digit growth for the second time in three months. Acc. To Montek Singh Ahluwalia.the figure is strong enough to indicate that India’s IIP is still in good shape and the trend will continue in future

The manufacturing sector grew by 11.1% y-o-y compared to -1.2% in Oct’08 y-o-y on account of increased manufacturing activities. This sector has seen a major correction in its numbers. The electricity sector increased to 4.7% from 4.4% in Oct’08 y-o-y. Manufacturing and electricity sectors both grew by 9.3% & 7.9% respectively in Sep’09

The mining sector, posted a growth of 8.2% against 2.8% in the same month of the last year. It grew by 8.6% in Sep’09 y-o-y respectively. It has been consistently showing good performance since the last 3-4 months

In the use-based category the basic goods, capital goods and the intermediate goods sector registered a growth of 5.0%, 12.2% and 14.3% y-o-y respectively compared to 2.7%, 3.1% and -3.7% y-o-y respectively in Oct’08. All the three sectors have performed extremely well: especially the capital goods segment which posted negative figures for around 3-4 months starting from March

The consumer goods sector has grown by a satisfactory 11.8% y-o-y compared to its growth of -2.3% in Oct’08 y-o-y. The sector’s growth got injected by a boost in the consumer durables segment which grew by 21.0% y-o-y, a huge increase from -3.0% in Oct’08 y-o-y. Even the consumer non-durable goods performed stupendously registering a growth of 8.1% compared to a growth of -2.0% in Oct’08. It has been performing meagerly since last 4-5 months, registering low growth figures since last few months and even negative at times

Author: Rahul Sonthalia, Analyst, Kredent Group