Industrial production shrinks by 0.1% in Aug; mining, power see decline

Marking the first contraction in 22 months, India's index of industrial production (IIP) for August 2024 shrunk by 0.1% from 4.7% in July 2024, according to data released by the central government on October 11. The industrial production saw a slight decline in August 2024 due an unfavourable base, with IIP in August 2023 at 10.3%.

The growth rates of the three core sectors -- mining, manufacturing and electricity -- stood at -4.3%, 1% and -3.7%, respectively. The government says it is likely that the decline in the growth of the mining sector is due to heavy rainfall in the month of August 2024.

The quick estimates of IIP stand at 145.6 in August 2024 against 145.8 in August 2023. The Indices of industrial production for the mining, manufacturing and electricity sectors for August 2024 stood at 107.1, 145.9 and 212.3, respectively.

Within manufacturing, the top three positive contributors for August 2024 were – “manufacture of basic metals” (3.0%), “manufacture of electrical equipment” (17.7%), and “manufacture of chemicals and chemical products” (2.7%).

The data shows the indices at 141.6 for primary goods, 108.1 for capital goods, 162.2 for intermediate goods and 180.2 for infrastructure or construction goods for August 2024. The indices for consumer durables and consumer non-durables stood at 129.6 and 141.6, respectively.

The corresponding growth rates of IIP as per use-based classification in August 2024 over August 2023 are -2.6% in primary goods, 0.7% in capital goods, 3% in intermediate goods, 1.9% in infrastructure or construction goods, 5.2% in consumer durables and -4.5% in consumer non-durables.

Based on the use-based classification, the top three positive contributors to the growth of IIP for August 2024 were -- intermediate goods, consumer durables and infrastructure or construction goods.

Along with the quick estimates of IIP for August 2024, the indices for July 2024 have undergone the first revision and those for May 2024 have undergone final revision as the updated data was received from the source agencies, says the ministry. "The quick estimates for August 2024, the first revision for July 2024 and the final revision for May 2024 have been compiled at weighted response rates of 92%, 94% and 96%, respectively," the ministry says.

The Centre says the next IIP data will be released on November 12, 2024.