India's industrial production rises by 5.2% in November, marking the highest growth since May.

India's factory output, as indicated by the Index of Industrial Production (IIP), saw a notable increase of 5.2% in November 2024, the highest in six months. This growth, up from 3.7% in October, is primarily attributed to a favorable base effect and a seasonal rise in demand, particularly in manufacturing, capital goods, and consumer durables during the festive season. However, the cumulative growth for April-November 2024 stands at 4.1%, a slowdown compared to the 6.5% growth during the same period last year.

Key Highlights

Overall Growth

• Factory output grew by 5.2% in November 2024, marking the highest growth in six months.
• The growth was driven by favorable base effects and increased demand during the festive season.
• Cumulative growth for April-November 2024 is 4.1%, lower than the 6.5% growth recorded in the same period last year.

Sector-wise Performance

• Manufacturing: Manufacturing output rose by 5.8% in November 2024, the highest in eight months, mainly due to the festive season. This compares to 1.3% growth in November 2023 and 4.4% in October 2024.
• Mining: Mining output grew by 1.9% in November, up from 0.9% in October, but slower than the 7.0% growth seen in November 2023.
• Electricity: Electricity output increased by 4.4% in November, compared to 2.0% in October and 5.8% in November 2023.

Use-based Classification

• Primary Goods: Output of primary goods grew by 2.7% in November, slightly higher than 2.5% in October but lower than 8.4% in November 2023.
• Capital Goods: Capital goods output surged by 9.0% in November, signaling positive investment sentiment, compared to 3.1% growth in October and a 1.1% contraction in November 2023.
• Consumer Durables: Consumer durables saw a significant 13.1% growth in November, the highest of the year, up from 5.7% in October and 4.8% in November 2023, likely driven by festive demand.
• Consumer Non-durables: Consumer non-durables, such as FMCGs, grew by just 0.6% in November, a slowdown compared to 2.6% in October and a contraction of 3.4% in November 2023.

Economic Outlook

• The positive growth trend across all sectors since September 2024 raises hopes for industrial recovery.
• The surge in consumer durables is seen as a seasonal spike due to festive demand rather than a long-term trend.
• Economists caution that the growth in consumer durables may not continue beyond the festive season.