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November IIP turns positive, jumps 5.9%

The cumulative growth for the period April-November 2011-12 stood at 3.8 per cent over the corresponding period of the previous year.

Source: AP
Source: AP


The Index of Industrial production number for the month of November 2011 came in at 5.9 per cent versus a -5.1 per cent contraction in the month of October.

The General Index for the month of November 2011 stood at 167.4, which is 5.9 per cent higher as compared to the level in the month of November 2010. The cumulative growth for the period April-November 2011-12 stood at 3.8 per cent over the corresponding period of the previous year.

The manufacturing sector grew at 6.6 per cent in November, 2011 against - 6 per cent in the corresponding month in 2010, while 6.5 per cent year on year.

Mining sector growth for November stood at -4.4 per cent versus -7.2 per cent  month on month, while positive 6.9 per cent year on year . 

 

Electricity sector growth for November stood at 14.6 per cent versus 5.6 per cent month on month and 4.6 year on year.

 

Capital Goods sector grew at -4.6 per cent against -25.5 per cent on month on month basis, while 25.7 per cent year on year.

 

Growth of basic goods stood at 6.3 per cent versus -0.1 per on month on month and 5.7 per cent year on year.

 

Intermidiate goods growth for November stood at 0.2 per cent versus -4.7 per month on month, while 4.3 per cent year on year.

 

The October output figure had been revised to minus 4.1 per cent.

 

India's economy grew by 6.9 per cent in the period of July to September, 2011, the slowest rate of expansion in nine quarters.

C Rangarajan, chairman of the Prime Minister's Economic Advisory Council, said, "The average industrial production number for FY12 is expected to grow a little above 7 per cent. Production will pickup in the second half of FY12. Growth won’t be feeble but will also not as strong as the last year."

Rangarajan feels that the manufacturing sector growth may stay at current levels in the near term. "We now need to watch out closely for WPI Inflation numbers," he added.

Leif Eskesen, chief economist for India and ASEAN at HSBC Global Research, said that the November IIP numbers came higher on the festive demand. "The service sector continues to be resilient. It is premature to judge inflation readings," he clarified.

Analysts had expected the November IIP to grow at 2.1 per cent against a contraction of 5.1 per cent in October 2011.

Gaurav Kapur, Senior Economist, RBS said that the November industrial output numbers will give some comfort to the RBI since they have exceeded the expectations. Commenting on the mining sector output, which declined 4.4 per cent, Kapur said that the mining sector production numbers are a cause of worry. 

"The IIP numbers are continuing to show slowdown in growth. We will watch out for the non-core WPI inflation numbers. We expect growth to be below 7 per cent for the next few quarters," he clarified. 

He further said that  festive season buying has led to a 30 per cent growth in the two-wheeler segment. " A seasonal pick up in consumer goods could have been the trigger," he added. 

Indranil Pan, Chief Economist, Kotak Mahindra Bank told NDTV Profit that the IIP numbers may see a slowdown going forward. He feels that the inflation number could be weaker. "We don't see any significant change in the RBI's stance in the near term. We expect a rate cut of 100 basis points in the rate cycle. However, we don't see investment cycle picking up," he said. 

Pan sees core manufacturing sector numbers on the higher side, however, he warns that the global demand will significantly remain on the lower side.

Shantanu DasGupta, Vice President – Corporate Affairs & Strategy, Asia South, Whilrpool told NDTV Profit that the company has seen lower demand in November and December.

Commenting on food inflation numbers and interest rate, he said, " We see some positive indications of food inflation coming down. We expect consumption to moderate in the near term. Interest rate has a bearing on growth and demand in our industry."