Analysis of a industrial production
Answers
owever, the production is not as strong as the headline print depicts due to the favourable base effect in place as last year in Jul'18 the industrial production was impacted by the GST rollout. Stripping of the base effect, the industrial production stood at 5.8% (YoY, 3m average).
The underlying trend depicts industrial production growth to be on the rise since Mar'18 logging more than 5% growth in Jun and Jul'18.
Clearly, industrial production seems to be out of the woods and seems to have recovered from the GST and demonetisation barrier.
The cumulative performance also depicts that industrial production is far stronger this year compared to last year. During Apr-Jul'18, industrial production growth stood at 5.4% albeit helped partially by a favourable base, but even above 5% without the base effect compared to the 1.7% YoY growth in Apr-Jul'17.
Except for mining, all the other industries registered an increase in output growth compared to the last year.
The manufacturing (7% YoY) and electricity (6.7% YoY) continued to record robust growth.
As per use-based classification, the capital goods production growth, indicative of the investment demand, stood at 3% YoY in Jul'18, showing signs of recovery from the contraction in growth in the first four months of the last fiscal year. The primary goods production moderated but remained strong at 6.9% YoY. The bright spot was the continued strong growth in the infrastructure segment which recorded 8.4% YoY growth in Jul'18.