Sector Trends     10-Jun-24
Economy
IIP Growth Projections: Growth expected to improve slightly to 5.0% for April 2024
Eight core infrastructure sector output growth rises to 6.2% in April 2024
Central Statistical Office (CSO), operating under Ministry of Statistics and Programme Implementation (MOSPI), is scheduled to release the data on India's industrial production (base year 2011-12=100) for the month of April 2024 on 12 June 2024.

Capital Market has conducted a poll amongst economists across leading banks, rating agencies, financial advisories and brokerages for April 2024 IIP growth projections. The results of the poll as indicated by the median of IIP growth forecasts from economists, shows that industrial production growth would improve slightly to 5.0% in April 2024 as against 4.9% growth recorded in March 2024.

Economists expect IIP growth to be in the range of 4.0-5.5% in April 2024. The median of various IIP growth forecast received from economists stood at 5.0%, while the average was lower at 4.9% for April 2024.

Major Indicators for IIP: April 2024

Growth of Major Indicators (%)
Indicator Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24
IIP 6.4 11.9 2.5 4.4 4.1 5.6 4.9  
OECD's CLI for India * -0.5 -0.4 -0.3          
PMI - Manufacturing 4.4 0.4 0.5 -5.0 18.2 2.9 4.8 2.8
PMI Services Business Activity Index 12.3 6.0 0.9 0.9 8.0 2.0 5.9 -1.9
Composite PMI Output Index 10.7 5.2 1.2 -1.5 6.4 2.7 5.8 -0.2
Exports -2.6 6.2 -2.8 1.0 3.1 11.9 -0.7 1.1
Imports -15.0 12.3 -4.3 -4.8 3.0 12.2 -6.0 10.3
Services Exports (US$ Million) -2.7 10.4 4.0 1.0 10.8 3.5 -1.4 17.7
Services Imports (US$ Million) -10.4 -0.3 -11.0 -1.0 0.2 1.8 -2.1 19.1
Railway Loading 6.7 8.5 4.3 6.4 6.4 10.1 8.6 1.5
Rail Passenger 3.9 8.5            
Port Traffic 0.3 13.8 17.0 0.7 3.2 2.4 3.6 1.3
Non-food credit 17.6 20.4 21.1 20.0 20.3 20.5 20.2 18.8
Air Passenger Traffic 19.4 11.9 10.6 9.9 7.2 8.1 6.5 6.0
Air Freight Traffic (000 Tonnes) -0.3 13.1 6.6 10.8 15.5 22.7 17.3 10.0
Eight Core Infra Index 9.4 12.7 7.9 5.0 4.1 7.1 6.0 6.2
Tea Production -16.8 12.1 -6.2 20.1 24.6 0.3 -21.5 -8.7
Fuel Product Consumption 7.9 4.8 -2.2 2.5 8.1 5.9 -0.6 6.1
Government Expenditure 3.2 -14.0 -13.8 7.1 -14.0 20.4 0.0 39.3
* CLI: Composite Leading Indicators 

Eight core infrastructure sector: April 2024

The output of eight core industries, with a combined weight of 40.3% in the Index of Industrial Production (IIP), increased 6.2% in April 2024 over April 2023. The output of electricity generation increased 9.4%, natural gas 8.6% and coal 7.5%. Further, the output of steel moved up 7.1%, petroleum refinery products 3.9%, crude oil 1.6% and cement 0.6%. However, the output of fertilizers declined 0.8% in April 2024. The output of the core sectors moved up 7.6% in April-March FY2024 compared with the 7.8% growth in April-March FY2023.

During April 2024, the eight-core infrastructure sector would contribute overall IIP growth with the positive share of 266 bps, based on 40.3% weight and 6.2% growth in output recorded for the month. The contribution of the eight-core infrastructure sector is showing a rise in contribution to the IIP from contribution of 262 bps in February 2024.

Index of industrial production: March 2024

India's industrial production (base year 2011-12=100) increased 4.94% in March 2024 over March 2023. The manufacturing sector output moved up 5.15%, while the mining sector output rose 1.23% in March 2024. Further, the electricity generation increased 8.62% in March 2024 contributing to the overall rise in industrial production.

As per the use-based classification, the output of primary goods moved up 2.46% in March 2024, while the output of capital goods increased 6.10% in March 2024. Further, the production of intermediate goods rose 5.08% and infrastructure/ construction goods gained 6.88% in March 2024. Within the consumer durables, the output of consumer durables increased 9.53% and consumer non-durables moved up 4.88% in March 2024.

In terms of industries, 15 out of 23 industry groups in the manufacturing sector have shown positive growth during the month of March 2024 as compared to the corresponding month of the previous year.

India's industrial production increased 5.86% in April-March FY2024. The manufacturing sector output increased 5.42%, while the mining sector output gained 7.48% in April-March FY2024. Further, the electricity generation rose 7.05% in April-March FY2024 contributing to the overall increase in industrial production.

World Industrial production growth: March 2024

As per the data compiled by the Netherlands Bureau for Economic Policy Analysis, the world industrial production increased 1.6% in March 2024 compared to 0.3% rise in March 2023. The industrial output in emerging economies improved 4.3%, while industrial output in advanced economies dipped 1.4% in March 2024 over March 2023.

The industrial production of the Euro area declined 5.6% and US rose 0.1%, while that of Japan declined 6.7% in March 2024 over March 2023.

Among the emerging economies, the industrial output of China increased 6.7%, while that of emerging Asia excluding China moved up 3.1% in March 2024. The industrial production of the Eastern Europe rose 6.1% in March 2024.

World Industrial Production Excluding Construction 2005=100
  Weights Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24
World 100.0 0.6 0.5 1.1 1.6 2.4 1.5 1.6 1.2
Advanced economies 56.3 -1.9 -2.0 -1.2 -1.0 0.6 -1.3 -1.4 -0.5
Euro Area 15.3 -4.2 -5.3 -4.1 -4.3 -0.8 -4.7 -5.6 -1.6
United States 17.2 -0.1 -0.2 -0.8 -0.2 1.1 -0.7 0.1 0.1
United Kingdom 2.2 1.1 1.1 -0.7 0.0 0.5 0.1 1.0 0.5
Japan 8.4 -4.0 -3.1 -1.7 -1.5 -0.3 -3.2 -6.7 -3.0
Advanced Asia excl Japan 3.6 -3.9 0.4 2.8 3.2 4.5 6.6 7.0 1.5
Other advanced economies 9.6 0.1 -0.9 0.7 0.8 1.1 0.4 1.6 0.7
Emerging economies 43.7 2.9 2.8 3.2 4.0 3.9 3.9 4.3 2.7
China 16.7 4.8 4.6 4.5 6.8 6.9 6.5 6.7 4.5
Emerging Asia excl China 6.5 4.2 2.1 4.9 1.2 1.6 2.1 3.1 2.4
Eastern Europe / CIS 3.3 5.6 6.1 5.0 4.0 3.8 4.8 6.1 4.9
Latin America 8.2 1.1 1.8 1.3 1.3 0.6 0.2 0.7 0.7
Africa and Middle East 9.1 -5.4 -4.5 -3.1 -2.4 -3.4 -2.7 -2.7 -3.7
Source: Netherlands Bureau for Economic Policy Analysis, Seasonally and working day adjusted (CPB)

Outlook

Industrial output growth continued to improve at healthy pace of 4.9% in March 2024 with healthy growth for all three sub-segments. As many as 15 out of 23 manufacturing industries have recorded positive growth in the output for March 2024. The growth is expected to remain steady as indicated by strong high frequency indicators of GST collections, PMI and diesel consumption etc. Global economic activity is rebalancing and is expected to grow at a stable pace in 2024. The high frequency indicators of domestic activity are showing resilience in 2024-25. The south-west monsoon is expected to be above normal, which augurs well for agriculture and rural demand. Coupled with sustained momentum in manufacturing and services activity, this should enable a revival in private consumption. Investment activity is likely to remain on track, with high capacity utilisation, healthy balance sheets of banks and corporates, government’s continued thrust on infrastructure spending, and optimism in business sentiments. Improving world trade prospects could support external demand. Headwinds from geopolitical tensions, volatility in international commodity prices, and geoeconomic fragmentation, however, pose risks to the outlook.

Economists Projections for IIP Growth - April 2024
Organization Projection (%)
Bank of Baroda 5.5
Care Ratings 5.5
HDFC Bank 4.6
ICRA 4.0
State Bank of India 5.0
   
Low 4.0
High 5.5
Average 4.9
Median 5.0
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