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The Economy Observer: IIP growth slows down in March

  • The Index  of  Industrial  Production  (IIP)  growth slowed  down  to  4.4%  in  March  2018  from  7%+  in  the  previous three months, as the favourable base effect dissipated in the month. The number was below our estimate/market consensus of a 5.6%/6.2% rise.
  • Lower II P growth can be primarily attributed to the manufacturing sector, where growth slowed down to 4.4% in March 2018 from an average of 9.1% in the previous three months. The deceleration was broad-based, with ~51% of the sector (v/s 28% in February 2018) reporting growth of less than 5%. 12 of the 23 industries within manufacturing witnessed a contraction in output.
  • As  per  use-based  classification,  output  of  capital  goods  declined  by  1.8%  YoY  in  March  after  growing  in  double-digits over the previous three months.  Growth in the output of consumer durables was also weak at 2.9%