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Economic indicators: Sep 2011 IIP

India's industrial output grew at its slowest pace in two years in September, providing further evidence of deceleration in the economy and raising the odds of a pause in the central bank's 20 month old policy tightening cycle. Production at factories, mines and utilities grew 1.9% from a year earlier in September, lower than an inwardly revised 3.6% growth a month ago.

The Quick Estimates of Index of Industrial Production with base 2004-05 for the month of September 2011 have been released by the Central Statistics Office of the Ministry of Statistics and Program Implementation. The General Index for the month of September 2011 stands at 163.2, which is 1.9% higher as compared to the level in the month of September 2010. The cumulative growth for the period April-September 2011-12 stands at 5.0% over the corresponding period of the previous year.

2. The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of September 2011 stand at 111.0, 175.7 and 144.1 respectively, with the corresponding growth rates of (-)5.6%, 2.1% and 9.0% as compared to September 2010 (Statement I). The cumulative growth in the three sectors during April-September, 2011-12 over the corresponding period of 2010-11 has been (-)1.0%, 5.4% and 9.4% respectively, which moved the overall growth in the General Index to 5.0%.

3. In terms of industries, fifteen out of the twenty two industry groups (as per 2-digit NIC-2004) in the manufacturing sector have shown positive growth during the month of September 2011 as compared to the corresponding month of the previous year (Statement II). The industry group ‘Radio, TV and communication equipment & apparatus’ has shown the highest growth of 25.0%, followed by 19.0% in ‘Other transport equipment’ and 16.6% in ‘Office, accounting & computing machinery’. On the other hand, the industry group ‘Electrical machinery & apparatus n.e.c.’ has shown a negative growth of 27.7% followed by 8.2% in ‘Furniture; manufacturing n.e.c.’ and 8.1% in ‘Wearing apparel; dressing and dyeing of fur’.

4. As per Use based classification, the growth rates in September 2011 over September 2010 are 4.5% in Basic goods, (-) 6.8% in Capital goods and 1.5% in Intermediate goods (Statement III). The Consumer durables and Consumer non-durables have recorded growth of 8.7% and (-) 1.3% respectively, with the overall growth in Consumer goods being 3.5%.

5. Some of the important items of capital goods showing high negative growth during the current month and thus contributing to the low growth of the overall index for the month include ‘Cement Machinery’ [(-) 70.4%], ‘Sugar Machinery’ [(-) 63.8%], ‘Cable, Rubber Insulated’ [(-) 45.3%] and ‘Relays, Fuses and Switchgears’ [(-) 30.0%]. However, some important items of the capital goods are also showing significant growth. These are: ‘Conductor, Aluminium’ (45.0%), ‘Earth Moving Machinery’ (44.9%), ‘X-ray equipment’ (35.0%) and ‘Tractors’ (30.4%).

6. The other important items showing growth during the month are: ‘Fruit Pulp’ (90.6%), ‘Paraxylene’ (64.0%), ‘Stainless/ alloy steel’ (63.3%), ‘Woollen Carpets’ (61.9%), ‘Linear low density polyethylene’ (58.9%), ‘Tanned or Chrome Skins and Leathers’ (58.1%), ‘Steel Castings’ (48.0%), ‘Petroleum Coke’ (44.6%), ‘Scooter and Mopeds’ (33.0%), ‘Marble Tiles/Slabs’ (32.3%), ‘Polythene Bags including Hdpe & Ldpe Bags’ (31.5%) and ‘Telephone Instruments Including Mobile Phone And Accessories’ (31.1%).

7. Along with the Q.E. of IIP for the month of September 2011, the indices for August 2011 have undergone the first revision and those for June 2011 have undergone the final revision in the light of the updated data received from the source agencies. (It may be noted that these revised indices (first revision) in respect of August 2011 shall undergo final (second) revision in IIP for the month of November 2011)

8. Statements giving Quick Estimates of the Index of Industrial Production at Sectoral, 2-digit level of National Industrial Classification 2004 and by Use based classification for the month of September 2011, along with the growth rates over the corresponding month of previous year, including the cumulative indices and growth rates, are enclosed.