Industrial output growth in November was slowest in 17 months, shows data

The previous low was in June 2017 when IIP growth contracted by 0.3 per cent

The previous low was in June 2017 when IIP growth contracted by 0.3 per cent

However, the good news is that overall IIP growth for April-November 2018 came in at 5 per cent, much higher than the 3.2 per cent in the corresponding previous period.

The latest Index of Industrial Production (IIP) print was also lower than the upward revised 8.4 per cent year-on-year growth recorded in October 2018.

Industrial production growth stood at 0.5 per cent in November, the government said on Friday.

India's industrial output slipped to 0.5 percent in November as compared to 8.1 percent in October mainly on the back of contraction in manufacturing sector, mining, capital goods and consumer durable goods.

Industrial growth unexpectedly plummeted to a 17-month low in November as a postfestival season decline in manufacturing, fewer working days in the month and tighter financial conditions pulled down output.

As per Use-based classification, the growth rates in November 2018 over November 2017 are 3.2 percent in Primary goods, (-) 3.4 percent in Capital goods, (-) 4.5 percent in Intermediate goods and 5.0 percent in Infrastructure/ Construction Goods. Mining activity, which accounts for over 14 percent of the entire index grew 2.7 percent in November from was at 7 percent in October and 1.4 percent past year.

According to data put out by the ministry of statistics and programme implementation, India's manufacturing output contracted by 0.4% compared to 7.9% growth in October 2018. Consumer durables output also dipped by 0.9 percent as against a growth of 3.1 percent a year earlier. "However H2 average growth will be lower than H1, as also corroborated by advance estimates of GDP", Shubhada Rao, chief economist, Yes Bank said. "Despite IIP growth showing 5 per cent or higher growth in 8 out of past 12 months, India Ratings has consistently highlighted that industrial growth is still not on sound footing. The key reason for this view has been high variability in industrial growth across sectors and within sectors on month on month basis".

Ten of 23 industry groups in the manufacturing sector showed positive growth in November compared to the same month in the year before.

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