INDIAN INDUSTRIAL PRODUCTION 2012.......12 APRIL 2012

India Industrial Production

Industrial Production in India increased 6.8 percent in January of 2012. Industrial production measures changes in output for the industrial sector of the economy which includes manufacturing, mining, and utilities. Industrial Production is an important indicator for economic forecasting and is often used to measure inflation pressures as high levels of industrial production can lead to sudden changes in prices. From 1994 until 2010, India's industrial production averaged 7.49 percent reaching an historical high of 17.70 percent in December of 2009 and a record low of -0.20 percent in December of 2008.  CHART OF IIP FROM 2000 TO 2012 ATTACHED. SEE THE CHART AND ANALYZE THE TREND OF IIP

IIP FROM 2000 TO 2012 (APRIL 2012)

Industrial Production is an economic report that measures changes in output for the industrial sector of the economy. The industrial sector includes manufacturing, mining, and utilities. Although these sectors contribute only a small portion of GDP (Gross Domestic Product), they are highly sensitive to interest rates and consumer demand. This makes Industrial Production an important tool for forecasting future GDP and economic performance. Industrial Production figures are also used by central banks to measure inflation, as high levels of industrial production can lead to uncontrolled levels of consumption and rapid inflation.
 

Feb IIP Likely Slowed Slightly: Reuters Poll

Forecasts in the poll ranged from 3.5 per cent to 9.5 per cent, reflecting the notoriously volatile nature of the IIP data

 

India's February industrial output probably slowed a tad from January's surge, as growth in the manufacturing and consumer non-durables sectors likely moderated, a Reuters poll showed.  A survey of 26 economists showed they expect industrial production (IIP) to grow 6.6 percent in February from a year ago, slightly lower on a sequential basis when compared with January's 6.8 percent.  Forecasts in the poll ranged from 3.5 per cent to 9.5 per cent, reflecting the notoriously volatile nature of the IIP data.  "A lower PMI and easing export growth in February 2012 point towards a moderation of manufacturing growth," said Aditi Nayar, economist at ICRA Ltd, which forecasts a 4.2 percent rate for the month.  

 

India's manufacturing sector expansion, as measured by the purchasing managers' index (PMI), eased slightly in February after hitting an eight-month high in January.  Growth in exports moderated in February when compared to January, on the back of sluggish demand for Indian goods in key markets such as the United States and Europe.  Signs that the downturn in the euro zone's smaller members has spread to core countries such as Germany and France, combined with weak jobs growth in the United States, have revived doubts about whether their economic recovery is on solid footing.  India's industrial output growth painted an optimistic picture in January by clocking its fastest pace in seven months, boosted by strong manufacturing sector activity and a surprise jump in consumer non-durables.  The consumer non-durables sector grew by 42.1 percent in January from a year earlier, while manufacturing output, which accounts for 76 percent of industrial production, expanded 8.5 percent in January from 2.6 in December.  

 

Economists said the huge jump in the consumer non-durables number was a one-off event. That kind of boost "is unlikely to be sustained," said ICRA's Nayar.  However, India's infrastructure sector output, which accounts for around 38 percent of industrial output, grew by a sharp 6.8 percent in February from a year earlier, much higher than January's on-year increase of 0.7 percent.  "The performance of the core sector has been impressive in February, which is going to contribute towards the higher number coming in for the overall IIP," said Madan Sabnavis, chief economist at CARE Ratings, who forecasts 6.7 percent IIP growth.