NEW DELHI: Industrial production increased to a seven-month high of 5.2% year-on-year in November 2024 as compared to 3.7% in October, thanks largely to a low-base effect. In November 2023, industrial production has risen by a moderate 2.5%.
Production by the mining sector in November grew at 1.9% y-o-y compared to 0.9% in October. The manufacturing sector posted output growth of 5.8% in November against 4.4% in October. Electricity generation grew by 4.4% year-on-year compared to 2% in October.
Though sequentially, industrial production contracted by 1.2% in November as the effect of festive season waned earlier this year. Despite the November industrial production growth largely attributed to low base effect, experts see this as a positive indicator.
“November 2024 IIP adds to the recent spate of data that have shown somewhat better growth, vis-a-vis Q2FY25. These include core industries, E-way bills, cement production, passenger vehicle sales among others, underscoring that Q2 indeed was a growth trough,” says a QuantEco note.
The Second quarter GDP growth crashed to 5.4% resulting in the government moderating the FY25 GDP growth rate to 6.4%, which is lower than the RBI’s 6.6% estimate. Economists at SBI have estimated an even lower GDP growth number for FY25 at 6.3%.
As per rating agency Crisil, the festive season led to a rise in production of consumer discretionary products. Consumer durables saw strongest rise in index (13.1% in Nov) among major production sectors. “The rise was seen across low and high value items including clothing, electronics, furniture and automobiles. Consumer non-durables grew much weaker (0.6%),” noted Dharmakirti Joshi, Chief Economist at Crisil.