Industrial output bounced back to rise 7.1% in November

First uptick in consumer durables, non-durables output after a streak of contraction

India’s industrial production growth rose to a five-month high of 7.1% in November. File | Photo Credit: Kamal Narang

India’s industrial output bounced back to rise 7.1% in November 2022, after plummeting 4.2% in October 2022 as per revised estimates. 

The rise was aided by base effects as November 2021 had clocked just 1% growth, but also marked a 6% uptick in output levels over October 22, which incidentally recorded the lowest level for the Index of Industrial Production (IIP) since November 2021. 

After having tanked nearly 6% in October, Manufacturing output improved to grow 6.1% from November 2021, and rising 6.55% from October 2022 levels. 

Mining output growth accelerated from 2.5% in October to 9.7% in November. Electricity generation rose 12.7% in November, from just 1.2% year-on-year growth in October 2022, but total generation was 1.5% lower than the previous month. 

Classified on end-use basis, production grew for all six sub-sectors for the first time since June 2022, compared to just two sectors in October. Consumer non-durables output grew 8.9% in November after four months of contraction, with production hitting the highest level since December 2021. 

Consumer durables output rebounded to grow 5.1% after three months of contraction, but was boosted by the base effect of a 5.7% dip in November 2021. Capital goods which had contracted 1.7% in October, bounced up 20.7% in November and were 11.1% higher month-on-month. 

Despite the encouraging IIP numbers, India Ratings and Research economists said the recovery in factory output has a long way to go and will need more policy support. “Even now, the output levels of intermediate goods and consumer durables are less than pre-COVID levels,” said Sunil Kumar Sinha and Paras Jasrai.   

Infrastructure and construction goods grew 12.8%, with the highest output since March 2022. Intermediate goods rebounded from a contraction in October to grow 3% in November, while primary goods production rose 4.7%.   

ICRA chief economist Aditi Nayar expects IIP growth to moderate to ‘low single digits’ for December, in line with cooling growth in most available high frequency indicators for the month, relative to November levels. 

Seven of the 23 different manufacturing sectors tracked for the Index of Industrial Production (IIP) reported negative growth, led by apparel (-11.7%), coke and refined petroleum products (-9.8%) and textiles (-9%).

Of the rest, nine sectors reported close to 10% or higher growth, including other transport equipment (24%), motor vehicles (22.2%), printing of recorded media (22.1%) and machinery and equipment (up 20.8%).