Index of Industrial Production (IIP) update – August 2021

0
2871

Index of Industrial Production (IIP) registered a growth rate of 11.86 percent YoY in August’21, a marginal improvement from 11.45 percent YoY in July’21. On a sequential basis, IIP contracted by 0.23 percent in August compared to a growth rate of 7.23 percent in July’21. The uptick in domestic demand along with the favourable base effect contributed to the double-digit growth rate in IIP. From September’21 onwards, a favourable base effect wanes off, and we can expect IIP to register a single-digit growth rate.

Break-up of Index of Industrial Production (IIP)

 Aug’21Aug’20July’21
By Economic Activity
Mining and Quarrying23.57-8.7019.54
Manufacturing9.69-7.5510.46
Electricity15.98-1.8111.06
Use-based
Primary goods17-10.7512.42
Capital goods19.89-14.4330.47
Intermediate goods10.28-4.7814.43
Infrastructure/Construction goods11.09011.66
Consumer goods6.34-6.045.61

Source: CMIE

Based on Economic Activity:

  1. Mining and Quarrying registered a growth rate of 23.57 percent YoY in August’21. However, on a sequential basis, it contracted by 0.76 percent,
  2. Manufacturing sector registered a growth rate of 9.69 percent YoY in August’21. And, on a sequential basis manufacturing sector contracted by 0.53 percent.
  3. Electricity registered a growth rate of 15.98 percent YoY in August’21. It was the only component that registered a sequential growth rate of 2.17 percent in August’21.

Use-based classification:

  1. Primary goods registered a growth rate of 17 percent YoY in August’21. On a sequential basis, it receded by 0.93 percent compared to a growth rate of 4.98 percent in July’21
  2. Capital goods registered a growth of 19.89 percent YoY in August’21. On a sequential basis, it registered a decline of 1.62 percent
  3. Intermediate goods registered a growth rate of 10.28 percent YoY in August’21. On a sequential basis, it declined by 0.56 percent
  4. Construction goods registered a growth rate of 11.09 percent YoY in August. And, on a sequential basis, it registered a growth rate of 1.11 percent
  5. Consumer goods registered a growth rate of 6.34 percent YoY in August’21. On a sequential basis, it registered a growth rate 0.30 percent. Within consumer goods, consumer durables contracted by 0.34 percent MoM, and consumer non-durables registered a growth rate of 0.75 percent MoM.

Outlook: The upcoming festive season and the expected increase in domestic demand can be a boost to industrial production. Yet, the energy crisis can be a potential threat to economic recovery. We can expect the IIP growth rate to be in the single-digit for the next month as a favourable base effect wanes off in September’21.

LEAVE A REPLY

Please enter your comment!
Please enter your name here