New Delhi, Jan 11 (IANS) Favourable base effect as well as a healthy rise in manufacturing on the back of the festive season demand expanded India”s November factory output by 1.8 per cent.
This is the first time since August 2019 that the macro-economic factory production gauge — the Index of Industrial Production — has shown a rise.
The index had reported a fall of (-) 3.9 per cent in October, (-) 4.3 per cent in September and (-) 1.4 in August.
On a year-on-year basis, the growth rate of factory output during the month under review also surpassed the 0.2 per cent recorded during November 2018.
“The Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 for the month of November 2019 stands at 128.4, which is 1.8 per cent higher as compared to the level in the month of November 2018,” the Ministry of Statistics & Programme Implementation said.
“The cumulative growth for the period April-November 2019 over the corresponding period of the previous year stands at 0.6 per cent.”
As per the data, the output rate of the manufacturing sector rose by 1.7 per cent in November from a YoY rise of 2.7 per cent.
Similarly, the output of other notable sector such as mining activity increased by 2.7 per cent from a YoY fall of (-) 0.7 per cent, whereas the sub-index of electricity generation was lower by (-) 5 per cent from a rise of 5.1 per cent.
“As anticipated, a favourable base effect led to the IIP posting a turnaround to a mild growth in November 2019, although the pace of the same trailed our expectations,” said ICRA”s Principal Economist Aditi Nayar.
“Disaggregated data provides mixed cues, with five of the six use-based categories, except intermediate goods, posting a sequentially improved performance in November 2019, even as four of the categories continued to report an unenthusing YoY contraction in that month.”
Rajat Bahl, Chief Analytical officer and Head Financial Institutions, Brickwork Ratings, said: “This recoup in growth is partly attributed to festive demand as most of the manufacturing products like textiles, wearing apparel, etc, witnessed a spike in production growth.”
“To sustain the recovery in the manufacturing sector, production in other major manufacturing products also needs to pick up.”