Informist Poll
Oct IIP growth seen at 3-month high of 3.5% vs 3.1% in Sept
This story was originally published at 16:58 IST on 10 December 2024
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By Shubham Rana
NEW DELHI – India's industrial output likely rose 3.5% in October, the most in three months, thanks to an uptick in production in the festival season, according to an Informist poll of 12 economists. Industrial output, as measured by the Index of Industrial Production, had increased 11.9% in October 2023.
In September, industrial growth had rebounded to 3.1% from a 22-month low of (-)0.1% in August. A 3.5% increase in industrial output in October would mean a 2.2% sequential increase, which would be the highest since May. The National Statistical Office will release IIP data for October at 1600 IST on Thursday.
"High-frequency indicators suggest that aggregate demand regained strength in October, buoyed by festival season demand," Union Bank of India's economists said in a report.
An array of monthly numbers, ranging from core sector data to merchandise exports, suggest factory output rose at a faster clip in October. Core sector data for October, released on Nov. 29, showed output of India's eight core industries--which account for over 40% of the total weight of the IIP--grew 3.1% on year in October compared to a 2.4% growth in September. Meanwhile, India's goods exports were 17.3% higher in October from the same month last year, the fastest pace of growth in 28 months. Further, the manufacturing Purchasing Managers' Index rose to 57.5 in October from September's eight-month low of 56.5.
Other indicators such as e-way bill generation and vehicle production continued to post double-digit growth in October, although the pace was lower than in September. The number of e-way bills generated increased 16.9% on year in October, down from a growth of 18.5% in September, while vehicle production was 10.0% higher, only slightly lower than the 10.1% increase posted the previous month.
"Going forward, we expect IIP growth to stay in single digits in H2FY25 (Oct-Mar) yet see some support on the back of pickup in government spending and recovery in rural consumption demand," Union Bank of India economists said in the report, although they warned that the impact of global uncertainty under the second Donald Trump presidency "needs close watch".
In the first half of the current financial year, India's industrial output was up 4.0% on year, lower than the 6.2% recorded in Apr-Sept of 2023.
The following is the summary of the poll on IIP growth in October:
|
ORGANISATION |
IIP GROWTH ESTIMATE |
|
HDFC Bank |
2.6% |
|
Moody's Analytics |
2.7% |
|
Bank of Baroda |
2.8% |
|
CareEdge Ratings |
2.9% |
|
ICRA |
2.9% |
|
Capital Economics |
3.4% |
|
Nirmal Bang Institutional Equities |
3.5% |
|
Union Bank of India |
3.7% |
|
Motilal Oswal Financial Services |
3.8% |
|
Standard Chartered Bank |
4.0% |
|
STCI Primary Dealer |
4.2% |
|
Sunidhi Securities |
4.9% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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