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