The Index of Industrial Production (IIP) for May 2016 grew at 1.2% over the previous year.
This isn’t a big deal, and the April IIP number has been revised downwards to -1.35% (from the first reported -0.84%).
Components: Nothing To Write Home About
Manufacturing grew at 0.7% and Mining and electricity have come off their high growth months.
Things don’t look that great at the IIP use-case level too. Capital goods production is contracting, as is non-durables (FMCG). The rest aren’t making big noises either.
Our View: IIP isn’t a great measure of anything anymore, but it’s all we have in terms of production information. More of India is services than manufacturing and we need a similar index at the services level to understand if things are indeed going well or slowing down. But hey, when we have data, we have to display it – and graphs speak better than words.
