Factory Output For February Rose 5.6%, Improved Performance Of Consumer Goods
India's industrial output for the month of February rose by 5.6 per cent year on year, as revealed by the Index of Industrial Production (IIP) data from the Ministry of Statistics. In comparison, the revised IIP growth for January stood at 5.2 per cent.
The industrial output registered a growth of 5.5 per cent for the 11-month period from April 2022 to February 2023.
As per data from the National Statistical Office (NSO), the output from the manufacturing sector rose by 5.3 per cent, whereas mining and power generation increased by 4.6 per cent and 8.2 per cent, respectively, in February 2023. For the 11-month period from April 2022 to February 2023, manufacturing rose by 4.9 per cent, mining increased by 5.7 per cent, and electricity surged by 10 per cent. Factory output measured in terms of the IIP grew by 1.2 per cent in February 2022.
For the month of February 2023, the quick IIP estimates based on base 2011-12 stand at 138.7. The Indices of Industrial Production for the mining, manufacturing, and electricity sectors for the month of February 2023 stand at 129.0, 136.8, and 174.0, respectively.
When it comes to month-on-month growth, the mining sector saw a growth of 4.6 per cent compared to 8.8 per cent in the previous month, and the manufacturing sector grew by 5.3 per cent compared to 3.7 per cent in the previous month. The electricity sector registered a growth of 8.2 per cent compared to 12.7 per cent in the previous month.
The IIP data sheds light on how India's industrial sector has performed overall. It can also be used to evaluate the current state of the economy. Even so, to get a whole picture of the economy, it's crucial to take into account a variety of economic indicators, including GDP growth, inflation, and employment statistics.
As per use-based classification, the indices stand at 139.7 for primary goods, 104.4 for capital goods, 143.2 for intermediate goods, and 164.0 for infrastructure/construction goods for the month of February 2023. Further, the indices for consumer durables and consumer non-durables stand at 108.4 and 154.3, respectively, for the month of February 2023.
The growth of primary goods, capital goods, and infra goods was slower than the previous month at 6.8 per cent, 10.5 per cent, and 7.9 per cent, respectively. The consumer durables sector received a decline of 4 per cent compared to 7.5 per cent in the previous month, while the consumer non-durables sector grew by 12.1 per cent compared to 6.2 per cent in the previous month.
"The growth of capital goods is indicating a revival of the capex cycle in the economy, and the growth of consumer non-durables is indicating strong consumer demand, particularly in the rural segments. Going ahead, strong IIP would help the economic growth trajectory to become strong and achieve its potential growth rate in the coming quarters," commented Saket Dalmia, President, PHD Chamber.
"The year-on-year (YoY) growth in the Index of Industrial Production (IIP) rose slightly to 5.6 per cent in February 2023 from 5.5 per cent in January 2023, well above our forecast of 4.5 per cent. While the disaggregated trend was quite uneven, the improved performance of consumer goods is encouraging," said Aditi Naya, Chief Economist and Head Research and Outreach ICRA on IIP.
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