Capital Goods boost industrial output

The Index of Industrial Production (IIP) grew at 7.1 per cent in December 2017 compared to 2.4 per cent in December 2016, which was affected by demonetization drive. The growth in industrial output was supported by rise in manufacturing and capital goods production. 

The Central Statistics Office release IIP data which showed cumulative growth for the period April to December 2017 of 3.7 per cent over the corresponding period of the previous year. On a quarterly basis, the manufacturing sector grew 8.4 per cent, electricity sector grew 4.4 per cent, while mining showed dismal growth of 1.2 per cent as compared to December 2016. On a nine-month period basis, cumulative growth in these three sectors (April-December 2017) over the corresponding period was 3.8 per cent, 5.1 per cent and 2.8, respectively.

Of the 23 industry groups, 16 industries in the manufacturing sector have shown positive growth during the month of December 2017. Manufacture of other transport equipment showed the highest growth of 38.3 per cent, followed pharmaceuticals, medicinal chemical and botanical products at 33.6 per cent and production of computer, electronic and optical products grew at 29.8 per cent. While manufacture of tobacco products showed a negative growth of 28.2 per cent.

On a use-based classification, Capital goods grew at 16.4 per cent in December 2017 on YoY basis, while Intermediate goods and Infrastructure/Construction goods grew by over 6 per cent. Some important item groups that showed high positive YoY growth include Bodies of trucks, lorries and trailers at 254.1 per cent, API & formulations of hypolipidemic agents, anti-hypertensive 250.4 per cent, Shipbuilding and parts 144.1 per cent, Digestive enzymes and antacids 88.4%, Meters (electric and non-electric) 77.1 per cent, Lab equipment like separators, decanter centrifuge 67.8 per cent, Axle 48.7 per cent, Commercial Vehicle 40.6 per cent, Two-wheelers 36.0 per cent and Cement 20.4 per cent.