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It was a pathetic IIP for March. It came in at -0.1% v/s 0.1% in Feb’19. And the good news is that April IIP will not improve much as auto sales have already indicated that. The contraction in March IIP is a 23-month low. So do we need more numbers to tell us that we have slowed down, that too drastically?

A look at the IIP internals: (MoM)

Manufacturing -0.4% v/s -0.3%

Electricity 2.2% v/s 1.2%

Capital Good -8.7% v/s -8.8%

Consumer durables -5.1% v/s 1.2%

Consumer non-durables 0.3% v/s 4.3%

Mining -0.4% v/s -0.3%

Primary goods 2.5% v/s 1.2%

Intermediate goods -2.5% v/s -4.9%

In terms of industries, twelve out of the twenty three industry groups in the manufacturing sector have shown negative growth during the month of March 2019 (YoY). The industry group ‘Manufacture of furniture’ ‘has shown the highest negative growth of (-) 24.6 percent followed by (-) 18.5 percent in ‘Manufacture of other transport equipment’ and (-) 15.3 in ‘Manufacture of fabricated metal products, except machinery and equipment’. On the other hand, the industry group ‘Manufacture of tobacco products’ has shown the highest positive growth of 13.5 percent followed by 10.6 percent in ‘Manufacture of computer, electronic and optical products’ and 9.3 percent in ‘Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials’.

Manufacturing is consistently on the contraction and this seems to have now percolated down to all the other sectors. Private sector investment is almost non-existent and with the Govt worried over the fiscal deficit and elections, there has been no fillip given to industrial activity and we are now seeing the effect of that.

Clearly, consumption has fallen and March IIP is proof of this truth. Consumer durable has literally crashed. Even in Feb, it seemed to be holding on but March, which is typically a big month for this sector, seems to have been hit hard instead with a contraction.

Geo-political tensions, political turmoil at the center, rising crude price, tariff war – all these issues will be the focal point in the few weeks ahead now. There is no doubt that India’s industrial growth is crying for help; only it will have to wait for a little longer.

So what’s the silver lining here? L&T today guided a 12% growth in its order book for current fiscal. And if L&T is optimistic, maybe after the election outcome, we could look at a bounce back?  


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