Electricity generation dropped to its lowest since last February, although they were up 5.8% on a year-on-year basis, compared to a 20.4% uptick in October
India’s industrial output growth slumped to an eight-month low of 2.4% in November, from a 16-month high of 11.6% in October, with manufacturing output slipping to the lowest in seven months to grow just 1.2%.
Consumer durables production fell 5.4%, with output levels collapsing to their lowest since June 2021, when the country was in the grip of the second COVID pandemic wave. Electricity generation also fell to its lowest level since February 2023, although it was up 5.8% on a year-on-year basis, compared to a 20.4% uptick in October.
Just six of 23 manufacturing segments recorded growth in November, led by a 14.2% rise in coke and refined petroleum products, other transport equipment (up 9.8%) and motor vehicles (up 9.2%). On the other hand, furniture output dropped 30.5%, computers and electronics fell by 25% (sharper than their 15.2% cumulative decline so far in 2023-24), while wearing apparel production continued to drag, dipping 20.5% in November.
Apart from durables, two other end-use segments contracted in November — consumer non-durables (-3.6%) as well as capital goods (-1.1%) — while primary goods (8.4%), intermediate goods (3.5%) and infrastructure/construction goods (1.5%) clocked an uptick.
The Mining sector grew 6.8% and production levels were at the highest since April 2023. In absolute terms, consumer non-durables output was at its highest level since January 2023.
However, for capital goods, intermediate goods and infrastructure/construction goods, November’s production marked the lowest levels in seven, nine and 12 months, respectively.
Base effects from November 2022, when the Index of Industrial Production (IIP) rose 7.6% played a part in moderating the growth rate, but sequential contractions in electricity and manufacturing hurt further, said CareEdge Ratings chief economist Rajani Sinha.
“Within the use-based components, the concerning aspect is the continued weakness seen in consumer goods component and the sharp deceleration in infra-related segments with the contraction in capital goods,” she said, noting that a durable recovery in domestic demand is critical for the industrial output trajectory.
Aditi Nayar, chief economist at ICRA, reckoned that the IIP growth may only improve somewhat in the range of 3% to 5% in December, based on mixed indications from high-frequency indicators for last month.