Industrial production rises marginally to 3.5% in October, compared to 3.1% in September

In October 2024, India’s industrial production, measured by the Index of Industrial Production (IIP), saw a growth of 3.5 percent, surpassing the 3.1 percent recorded in September. According to official data released on December 12, the index rose from 144.9 in October 2023 to 149.9, indicating a positive trend in the Indian industrial sector.

A second consecutive increase in industrial production was recorded in October, after a slight drop in August. Among major industries, mining saw a 0.9 percent increase, manufacturing grew 4.1 percent compared to 3.9 percent the previous month and electricity showed a modest 2 percent growth.

Core sector industries, which account for 40 percent of the Industrial Production Index, also performed well in October. India’s core sector output expanded 3.1 percent in October, up from a revised 2.4 percent in September, with four out of eight sectors seeing accelerated growth.

Within the manufacturing sector, 18 of 23 industry groups at the NIC 2-digit level recorded positive growth in October 2024 compared to October 2023. The top three positive contributors for the month of October 2024 are: “Metal Manufacturing basics” (3.5%), “Manufacture of electrical equipment” (33.1%) and “Manufacture of coke plants and petroleum refining” (5.6%).

“The pick-up in IIP growth in October 2024 was mild, although widespread, across the three sectors. The year-on-year performance of the available high-frequency indicators showed a mixed trend in November 2024 relative to October 2024. The performance Some of the indicators related to mobility and transportation deteriorated in November 2024 compared to the previous month, including vehicle registrations, port cargo traffic and rail freight traffic, Aided by favorable basis, ICRA anticipates year-on-year IIP growth to accelerate to a much more acceptable ~5.0-7.0% in November 2024. However, with the shift in festive season clouding rates year-on-year growth rate, we believe that looking at the average growth performance for October-November 2024 would provide a more meaningful assessment of activity during this period,” said Aditi Nayar, Chief Economist and Director of Research and ICRA Limited Disclosure.