Industrial Output Growth Slows in March

  • 11 May 2024

On 10th May 2024, the Index of Industrial Production (IIP) for March reveals a growth slowdown to 4.9%, yet FY24 records a 5.8% rise, buoyed by manufacturing and construction sectors.

Key Points

  • March Slowdown: Factory output, measured by the IIP, decelerates to 4.9% in March from 5.6% in February, reflecting a favorable base effect.
  • FY24 Performance: Full financial year 2023-24 witnesses a 5.8% growth in industrial output, marginally higher than the previous year, bolstered by manufacturing and construction sectors.
  • Quarterly Comparison: January-March quarter sees an average industrial output growth of 4.9%, down from 6.2% in the previous quarter, potentially impacting Q4 GDP growth.
  • Capital Expenditure Impact: Slowdown attributed to moderation in government's year-end capital expenditure. Consumption trends depict mixed signals, with rural demand showing improvement.
  • Sectoral Performance: Manufacturing, constituting 77.6% of IIP weight, records 5.2% growth in March. Mining output hits a 19-month low, while electricity output expands.
  • Consumer Demand: Consumer durables output grows 9.5%, yet consumer non-durables show moderate growth, reflecting varied consumption patterns.
  • Sectoral Analysis: Fifteen of 23 manufacturing sectors register growth, with furniture and transport equipment leading. However, contractions observed in sectors like tobacco and leather.