Index of Industrial Production Current Affairs - 2019
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The Central Statistics Office (CSO) has released the data for the Index of Industrial Production (IIP) for the month of January. The IIP data shows that:
- Industrial output growth stood at 1.7 per cent in January against the 2.6% growth recorded in December 2018.
- The CSO has revised the industrial production growth for December 2018 has been revised upwards from 2.4% to 2.6%.
- The growth of output of manufacturing sector moderated to 1.3% and the electricity generation rose a mere 0.8% in January 2019.
- The mining output rebounded 3.9% in January 2019, snapping 1% decline in December 2018.
- Capital goods output declined 3.2% in January 2019 and the output of intermediate goods also fell by 3.0% in January 2019.
- The output of primary goods increased by 1.4%, while that of infrastructure/ construction goods moved up 7.9% in January 2019 when compared to January 2018.
- The output of consumer durables moved up 1.8%, while that of consumer non-durable durables also rose 3.8% in January 2019 when compared to January 2018.
- Eleven out of the twenty-three industry groups in the manufacturing sector have shown positive growth during the month of January 2019 as compared to January 2018.
- The cumulative industrial production increased by 4% in April-January FY2019 compared with 4.1% growth in April-January FY2018.
- The manufacturing sector growth has improved to 4.4% in April-January FY2019 from 4.2% growth in the corresponding period last year.
- The electricity generation output growth also improved to 5.8%, while mining output growth accelerated to 5.3% in April-January FY2019.
Index of Industrial Production
Index of Industrial Production (IIP) is a composite indicator that measures the changes in the volume of production of a basket of industrial products during a given period with respect to the volume of production in a chosen base period. The base year for the IIP is 2011-12.
The growth rate eight core sectors which include coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity witnessed a decline as per the data from the Ministry of Commerce and Industries.
Reduced growth rate of Core Sector
- The core sector which had witnessed a 6.2% growth in January 2018 witnessed a growth rate of 1.8 % in January
- The decline in the output of crude oil, refinery products and electricity pulled down the growth of eight core sectors to 1.8 %.
- The declining trend which has been witnessed since October 2018 suggests continued weakness in industrial activities and a weak second half economic growth in the financial year 2018-19.
- Production of crude oil, refinery products and electricity contracted 4.3%, 2.6% and 0.4%, respectively.
- Coal and cement output slowed to 1.7% and 11% in January as against 3.8% and 19.6% in January 2018, respectively.
- Natural gas, fertilisers and steel output grew 6.2%, 10.5% and 8.2 % respectively.
- Higher fertiliser growth has been attributed to the negative base effect last year.
Sluggish core sector growth would impact the Index of Industrial Production (IIP) as these segments account for about 41 per cent of the total industry output.