The capital goods, infra good and consumer durable goods registered a healthy increase in Nov’24.
FinTech BizNews Service
Mumbai, January 10, 2025: The industrial Growth is quite good at 5.2% and one can expect this tempo to be maintained in coming months, according to an analysis of the industrial growth numbers for November by Bank of Baroda Economist Jahnavi Prabhakar.
IIP growth registered a robust growth of 5.2% in Nov’24 against a growth of 3.7% in Oct’24. This was
supported by improvement across all the sectors. Manufacturing sector expanded by 5.8%, with over
15 sub-sectors registering stronger growth than last year. Both mining and electricity sector registered
strong growth in Nov’24. Within use-based classification, capital goods, infra good and consumer
durable goods registered a healthy increase in Nov’24. A festival push during this period, supported
the production. In the coming months, we expect a steady pick up in production level. This has been
reflected by high frequency indicators. Moreover, given the expectation of higher government
spending followed by improvement in investment in H2, the IIP growth is likely to be higher in H2FY25.
The attention will now shift towards upcoming Budget and RBI policy which is expected to be growth
conducive.
IIP growth strengthens: IIP growth rose by 5.2% (6-month high) in Nov’24 compared with 3.7% in
Oct’24. This was much higher than BoB’s estimate of 4.5% increase. This was driven by broad-based
improvement across all the sectors. Manufacturing sector registered a strong growth of 5.8% (8-
month high) against a growth of 4.4% in Oct’24. Both mining and electricity output expanded to 1.9%
(0.9% in Oct’24) and 4.4% (from 2%) respectively for Nov’24. The festive period has pushed forward
the production. On a FYTD basis, IIP growth moderated to 4.1% compared with 6.5% growth registered
last year. Manufacturing (4.1% against 5.9%) and mining (3.3% against 9.1%) sectors also noted slower
growth in FYTD’24. Electricity growth too softened to 5.3% from 7.7% last year.
Within manufacturing, out of 23 sub-sectors, 15 contributed to higher growth in Nov’24. These
included, manufacture of furniture, computer & electronic, fabricated metal, machinery equipment,
other non-metallic minerals amongst others. Notably, 7 sectors have recorded slower growth
including, manufacture of rubber, plastics, other transport equipment and coke and refined petroleum
products during the same period.
Capital good shines: Within use-based classification, infrastructure and capital goods output
registered remarkable growth at 10% (4.8% in Oct’24) and 9% (3.1% in Oct’24) in Nov’24 respectively.
Both primary (2.7% from 2.5% in Oct’24) and intermediate goods (5% from 4.6% in Oct’24) also
registered an improvement in Nov’24. Interestingly, growth for consumer durable output accelerated
to a 13-month to 13.1% in Nov’24 compared with a growth of 5.7% in Oct’24. However, the only
disappointment was the slower growth in FMCG goods at 0.6% (2.6% in Oct’24) in Nov’24.
Way forward: Amidst lower manufacturing, the advance estimates have recently pegged lower
industrial sector growth at 6.2% in FY25 from 9.5% in FY24 on account of base effect. However, despite
these figures, a revival is expected in H2 (H1FY25 at 4.1%) which has been evident from the incoming
data such as the GST collections, steady PMIs. Additionally, a push to capex spending as well as
recovery in investment cycle in the coming months bodes well for the overall sector. The focus will
now shift towards upcoming Budget with expectation of announcements that will boost
manufacturing growth.
