India’s Factory Output Grows 5.2% in November, Highest Since May

India’s factory output, measured by the Index of Industrial Production (IIP), recorded a significant rise of 5.2% in November 2024, the highest in six months. This increase comes after a 3.7% growth in October and is mainly attributed to a favorable base effect and a boost in manufacturing, capital goods, and consumer durables, especially amid the festive season. The industrial growth for the period April-November 2024 stands at 4.1%, a slowdown from the 6.5% growth recorded in the same period last year.

Key Highlights

Overall Growth

• Factory output grew by 5.2% in November 2024, the highest in 6 months.
• This growth is mainly driven by favorable base effects and a seasonal uptick in demand.
• Cumulative growth for April-November 2024 stands at 4.1%, down from 6.5% during the same period last year.

Sector-wise Performance

Manufacturing

• Manufacturing grew 5.8% in November 2024, the highest in 8 months, largely due to the festive season.
• This growth is compared to 1.3% in November 2023 and 4.4% in October 2024.

Mining

• Mining output grew by 1.9% in November, up from 0.9% in October.
• This is a slowdown from 7.0% growth in November 2023.

Electricity

• Electricity output increased by 4.4% in November, compared to 2.0% in October and 5.8% in November 2023.

Use-based Classification

Primary Goods

• Output of primary goods grew by 2.7% in November, slightly up from 2.5% in October but lower than 8.4% in November 2023.

Capital Goods

• Capital goods output surged by 9.0% in November, indicating investment sentiment, compared to 3.1% growth in October and a 1.1% contraction in November 2023.

Consumer Durables

• Consumer durables recorded a robust growth of 13.1% in November, a year-high, up from 5.7% in October and 4.8% in November 2023. This surge is likely driven by festive demand.

Consumer Non-durables

• Consumer non-durables, like FMCGs, grew by just 0.6% in November, showing a slowdown compared to 2.6% in October and a contraction of 3.4% in November 2023.

Economic Outlook

• The positive growth trend since September 2024 across all sectors (manufacturing, mining, electricity) raises hopes for industrial recovery.
• The rise in consumer durables is seen as a festive-driven demand spike, rather than a long-term trend.
• Economists warn that the improvement in consumer durables might not sustain post-festive season.