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IIP At 5% for April 2015, With A Smart 5% Gain in Manufacturing

The Index of Industrial Production (IIP) for April 2015 has something decent – with a 4.05% increase, which seems to finally be a good number. We have now had six continuous months of postive IIP growth which is the most since October 2011.



Components: Manufacturing Goes Up 5%

If you look at the components, the numbers have been hugely helped by Manufacturing (which forms 75% of the index).


Manufacturing is getting better, after a disastrous few years. Power production growth has dipped to zero, after many months of positive growth. Even mining has come down substantially.


The Use Based Indexes show only one thing: the disaster that was Consumer Durables manufacturing has ebbed. But it still remains negative in terms of growth. (Click for a larger pic)


What’s doing well?

We have an interesting addition this month: which sector is doing well in terms of growth? YoY growth at a sector level of manufacturing:


While Garments and Chemicals – our favourite segments – continue to do well, we also see good growth in Machinery after a long time. And Electrical equipment too, though the growth was even more heady a few months back.

The biggest surprise is Tobacco with a -26.7% growth!  Communication (mostly mobile phones now) and Office Equipment (mostly PCs) are understandable – we hardly manufacture those any more nowadays, and import much of it from abroad.

Our View: We finally have some good news. This might be a good thing if the news lasts till Monday. Main cues:

  • Manufacturing is coming back, but it needs to do double digit growth.
  • Mining should be helped once the coal mining pieces start again, though Electricity production is a concern.
  • The sectors that should be looked at closely are Wood, Chemicals, Garments and Electrical equipment.

We hope this will last and that the data will not be revised lower.


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  • kumar says:

    stuff is being manufactured, and moving out of their floor, but is it sitting in godowns, or is being sold to the end user?
    there were some scams in another large developed first world country, where one company goosed their earnings by manufacturing large quantities of their product, loaded it onto trucks, showed it as shipped, and parked the trucks outside in their parking lot.
    i am at a stage where any number that comes out is cause for rising scepticism. the upside will be enjoyed/claimed by the government immediately, whereas 3-4 months down the line, this figure would be proven to be laced with fraudulent data, or some calculation quirkiness.
    much like the cases filed against Dominique strauss kahn. most of the cases against him have been dismissed for lack of evidence, but the goal of the large country that was instrumental in creating the evidence has already been achieved. the man’s reputation today lies in tatters, and nothing will/can be done about it.