According to National Statistical Office (NSO) data, India’s industrial output grew by 1.3% in January 2022, recovering marginally from the revised growth rate of 0.7% in December 2021, but still only 0.7 percent from pre-pandemic levels. % was excessive.
Manufacturing output increased by 1.1%, while mining output increased by 2.8% and electricity generation increased by 0.9% year-on-year. Growth in manufacturing and mining output is largely due to base effects, as output from both sectors contracted by 0.9% and 2.4%, respectively, in January 2021, when the Composite Index of Industrial Production (IIP) contracted by 0.6% Was.
Consumer durables production fell for the fifth straight month in January, down 3.3% compared to a 0.1% shrinkage a year ago. Private consumption appeared to be subdued even after factoring in fast-growing consumer goods.
While consumer non-durables production grew 2.1% year-on-year in January, the fastest pace since August 2021, it marked a significant decline of 5% from December 2021 levels. Output growth in the segment was partially contracted from 2020 levels in September as well as December 2021.
Capital goods output also declined for the fourth straight month, falling 1.4% in January from a sharp 3.76 per cent decline in December. There was a sharp decline of 9% in capital goods production in January 2021.
Primary goods output growth slowed in January to 1.6% from 2.7% in December 2021, but growth in infrastructure and construction goods grew at an all-time high of 5.4% in three months, compared to only 2.05% in December. NSO revised its forecast for industrial production growth in October 2021 to 4.16% from 4.01% previously estimated.
Aditi Nair, Chief Economist, ICRA, said, “Relative to the pre-Covid level of January 2020, the IIP showed a modest 0.7% growth in the production of consumer durables and non-durables as well as capital goods.”
However, growth in infrastructure/construction goods is promising after the contraction in construction gross value added (GVA) in the economy in the third quarter of 2021-22,” she said.
ICRA expects IIP growth to remain below 2% in February as well, as manufacturing and power generation are unlikely to see a jump and mining output from state-run Coal India Ltd has been lower than in 2021.