Industrial Output Sees Significant Growth

NEW DELHI: The industrial output of the country experienced its fastest growth in six months during November, primarily driven by a rebound in the manufacturing sector and a favorable base effect. The National Statistical Office (NSO) reported that the Index of Industrial Production (IIP) increased by 5.2% in November, surpassing the revised 3.7% growth in October and the 2.5% recorded in the same month last year.

Manufacturing Sector Leads the Charge

The manufacturing sector showed a remarkable recovery, with a growth of 5.8% in November, up from 1.3% in the same month a year earlier and 4.4% in October. The capital goods sector, an essential indicator of investment activity, also saw a significant rise of 9% in November, compared to a contraction of 1.1% in November last year.

Consumer Durables and Non-Durables Show Mixed Signals

Consumer durables experienced a substantial increase of 13.1% in November, fueled by festive season demand, a stark contrast to the 4.8% contraction in November 2023. However, the consumer non-durables sector showed sluggish growth, with only a 0.6% rise, compared to a 3.4% contraction in the previous year.

"The broad-based improvement in manufacturing, electricity, and mining output has significantly supported the overall IIP growth. This sustained improvement in industrial activity is a positive sign, especially after the temporary setback in August 2024," stated Rajani Sinha, chief economist at ratings agency CareEdge.

"On the consumption front, the signals were mixed with growth in consumer durable goods being propped up by a supportive base while growth in consumer non-durables output decelerated. Broad-based improvement in the consumption scenario remains critical," added Sinha.