Informist Poll
Nov IIP growth seen at 4-month high of 4.2% vs 3.5% in Oct
This story was originally published at 10:57 IST on 9 January 2025
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By Shubham Rana
NEW DELHI – Growth in India's industrial output is likely to have risen to a four-month high of 4.2% in November from 3.5% the previous month, according to a poll of 12 economists by Informist. Industrial output, as measured by the Index of Industrial Production, had increased y 2.5% in November 2023.
To be sure, a 4.2% year-on-year increase in industrial production in November would translate into a 1.9% month-on-month fall in the headline index--the steepest since August--as activity slowed down in the penultimate month of 2024 compared to the previous month because of festival season demand in October.
The statistics ministry will release IIP data for November at 1600 IST on Friday.
High-frequency indicators are suggestive of a mixed picture in November, with the output of the eight core industries rising, although other data showed some moderation in activity compared to October. The output of India's eight core industries--which account for over 40% of the total weight of the IIP--rose at a four-month-high pace of 4.3% in November.
On the other hand, other indicators such as Purchasing Managers' Index, vehicle production, and e-way bills rose at a slower clip than in October. While India's manufacturing PMI fell to 56.5 in November from 57.5 the previous month, vehicle production grew 8.0%, down from 10.0% in October. The number of e-way bills generated increased 16.3% on year, slightly lower than the 16.9% growth in October.
The year-on-year industrial growth rate in November is also likely to benefit from a low base.
"We believe that IIP recovery is also partly attributed to favourable base effects, as Diwali was in mid-November in 2023, which weighed on IIP growth," Union Bank of India economists said in a report. The IIP had declined 2.6% month-on-month in November 2023.
"Going forward, we expect IIP growth to stay in single digits in H2FY25 (Oct-Mar) yet see some support on the back of pick-up in government spending and recovery in rural demand," Union Bank of India economists added. In the first seven months of FY25, industrial growth has come in at 4.0%, almost half the 7.0% growth posted in the same period of FY24.
The following is the summary of the poll on IIP growth in November:
|
ORGANISATION |
IIP GROWTH ESTIMATE |
|
HDFC Bank |
3.8% |
|
Acuite Ratings and Research |
4.0% |
|
India Ratings and Research |
4.0% |
|
Nirmal Bang Institutional Equities |
4.1% |
|
Union Bank of India |
4.1% |
|
CareEdge Ratings |
4.2% |
|
Bank of Baroda |
4-4.5% |
|
Motilal Oswal Financial Services |
4.5% |
|
YES Bank |
4.5% |
|
ICICI Bank |
4.6% |
|
Moody's Analytics |
4.6% |
|
ICRA |
5.8% |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Avishek Dutta
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