India’s Industrial Output Hits 6-Month High at 5.2%

New Delhi: India's industrial output growth accelerated to a six-month high of 5.2 per cent year-on-year in November 2024 against the backdrop festive demand and pick-up in manufacturing sector. The previous high growth rate at 6.3 per cent was recorded in May 2024 and it grew by 4.9 per cent in June and 5 per cent in July 2024, the government data said on Friday.

As per the data released by the ministry of statistics & programme implementation, the Index of Industrial Production or IIP recorded a growth of 2.5 per cent in November 2023. “The IIP growth was flat in August before picking up at 3.1 per cent in September and 3.7 per cent in October 2024,” the ministry said.

As per the data, the mining output growth decelerated to 1.9 per cent in November from 7 per cent expansion in the year-ago month. “The manufacturing sector's growth accelerated to 5.8 per cent in November from 1.3 per cent a year ago, while the power sector (generation) growth slowed to 4.4 per cent from 5.8 per cent a year ago,” the ministry’s data showed.

As per use-based classification, the data further showed that the capital goods segment growth accelerated to 9 per cent in November 2024 against a contraction of 1.1 per cent in the year-ago period. “Showing festive demand, consumer durable (or white) goods production grew by 13.1 per cent during the reporting month against a contraction of 4.8 per cent in November 2023,” the ministry said.

In November 2024, consumer non-durables output growth remained almost flat at 0.6 per cent compared to a contraction of 3.4 per cent in November 2023. “The infrastructure/construction goods reported a growth of 10 per cent in November 2024, up from a 1.5 per cent expansion in the year-ago period. The output of primary goods logged a 2.7 per cent growth in November 2024 against 8.4 per cent a year earlier,” it showed.

However, economists and analysts predict that given the base effects related to the shifting festive dates, an average growth over October-November tends to provide a better gauge of the underlying momentum. “The IIP rose expectedly to 5.2 per cent in November 2024, although it slightly trailed our forecast (5.8 per cent), with the sequential up-tick being broad-based across all three sectors, and all but one of the use-based categories (consumer non-durables),” said Aditi Nayar, chief economist & head – research & outreach at ICRA Limited.

“Overall industrial growth was modest at 4.4 per cent, driven by consumer durables (9.2 per cent) and infra/construction goods (7.3 per cent), with a distinctly lacklustre performance of primary goods (2.6 per cent) and consumer non-durables (1.5 per cent). The Y-o-Y performance of the available high frequency indicators saw a mixed trend in December 2024 vis-à-vis November 2024,” Nayar added.