Subdued manufacturing growth sequentially eases India’s Nov industrial production


Subdued manufacturing sector growth eased India’s industrial output on a sequential basis in November 2021.

The Index of Industrial Production (IIP) for November 2021 rose by only 1.4 per cent from a rise of over 4 per cent reported for October 2021. However, the production rate was higher on a year-on-year basis. In November 2020, the IIP had declined by (-) 1.6 per cent.

“For the month of November 2021, the Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 stands at 128.5,” the Ministry of Statistics and Programme Implementation said.

“The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of November 2021 stand at 111.9, 129.6 and 147.9, respectively.”

In terms of YoY percentage basis, the mining excavation output grew by 5 per cent from (-) 5.4 per cent in 2020-21, similarly, manufacturing production inched-up by 0.9 per cent from (-) 1.6 per cent and electricity generation rose at a slower rate of 2.1 per cent from 3.5 per cent.

Among the major use-based segments, the November data, on a YoY basis, showed that manufacturing of primary goods grew by 3.5 per cent from (-) 1.8 per cent, whereas capital goods production fell by (-) 3.7 per cent from (-) 7.5 per cent, and intermediate goods increased by 2.5 per cent from (-)1.8 per cent.

The production of infrastructure or construction goods rose by 3.8 per cent from 2.1 per cent.

However, consumer durables’ production degrew by (-) 5.6 per cent from (-) 3.2 per cent and the sub-segment of consumer non-durables rose by just 0.8 per cent from (-) 0.7 per cent.

ICRA Chief Economist Aditi Nayar said: “The IIP displayed an expected moderation to a feeble nine-month low growth of 1.4 per cent in November 2021, with the impact of the slackening momentum after the festive season compounded by the disruption caused by heavy rains in South India, amid the continuing issues afflicting the auto sector.”

“The dip in industrial growth was broad-based across the three sectors and six categories, with capital goods and consumer durables displaying an even deeper YoY contraction in November 2021.”

India Ratings and Research’s Principal Economist, Sunil Kumar Sinha, said: “Ind-Ra believes that with the rise in Covid cases driven by Omicron variant and subsequent restrictions imposed by the local or state government will not only accentuate the uncertainty but would adversely impact the normalisation of economic activities.

“Therefore, Ind-Ra expects the IIP growth to be in low single digits in the near term. It is now clear that heavy lifting by the government will have to continue to provide support to the economy.”

In addition, Brickwork Ratings’ Chief Economic Adviser M. Govinda Rao said: “A significant slowdown in the manufacturing sector growth (0.9 per cent) in particular, is a matter of concern as this will also have an impact on employment.

“The manufacturing sector output was constrained by severe power outages due to a supply shortage in coal in the last few months in addition to the supply disruptions in semiconductors. With the continued supply constraints and semiconductor shortage, the growth outlook for IIP does not look bright for December as well.”



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