IIP rebounds sharply in August

The index of India's industrial production grew by 10.4% in August 2009 which is the highest growth rate so far in the current financial year. First time after October 2007, the index of industrial production (IIP) has registered double digit growth rate. Significantly lower IIP growth rate in August 2008 too could have played a role in boosting the headline number in the month under review. India’s industrial production rose by 5.8% in April-August 2009-10 versus 4.8% in the same period a year earlier. The Government announced that it had revised the July industrial output figure to a growth rate of 7.2% from 6.8% predicted earlier.

Mining production rose by 12.9% as against 2.8% YoY. The manufacturing output climbed by 10.2% as against 1.7% in August 2008, while electricity saw a growth rate of 10.6% versus 0.8% in the same period last year. Consumer Durables output gained 22.3% as against 3.9% in the same period last year. While, Consumer Non-Durables output declined to 3.7% as against 7.3% in the corresponding month last year. Overall Consumer Goods output was at 8.5% versus 6.4% YoY.

Capital Goods production soared to 8.3% from 0.9% in the same month of last year. Basic Goods output was at 10% versus 3.9% in August 2008. Intermediate goods also grew at 14.3%, suggesting strong production going forward. Fourteen of the 17 segments saw growth during August, with seven of these 14 registering double-digit growth. The June IIP numbers had fueled hopes of a better-than-expected recovery, with the index showing 8.2% growth (up from 2.1% in May).