Industrial output races to 4.1% in April on better show by manufacturing

Powered by a better-than-expected manufacturing performance, the Index of Industrial Production (IIP) grew 4.1 per cent in April, higher than the 3.7 per cent recorded in the same month last year.

Manufacturing output, which has a weightage of 75 per cent in IIP, grew 5.1 per cent in April, higher than the 3 per cent growth seen in the same month last year.

While IIP performance in April was a positive, the retail inflation for May — which came in at 5.1 per cent — was in line with expectations.

The latest IIP performance is a pointer to some revival in industrial activity, given that factory output had grown 2.5 per cent (now revised upwards from 2.1 per cent earlier) in March.

For whole of 2014-15, IIP growth stood at 2.8 per cent, higher than the 0.1 per cent contraction seen the previous year.

Manufacturing performance for April was bolstered by the uptrend in capital goods output, which grew for the sixth straight month at 11.1 per cent. Consumer goods output expanded 3.1 per cent.

The consumer price index (CPI)-based inflation for May 2015 at 5.01 per cent was higher than 4.87 per cent in April. But it was significantly lower than the 8.33 per cent in May last year. Food price inflation came in lower at 4.8 per cent against 5.11 per cent the previous month. Food price inflation in May last year was 8.89 per cent.

The real worry for policymakers on the food inflation front should be pulses, which saw a year-on-year inflation of 16.62 per cent in May 2015.

Assocham President Rana Kapoor said the numbers seem to be “healthy and encouraging”.

FICCI President Jyotsna Suri said manufacturing growth seems to be gaining momentum.