Who wrote this article?

Deepak Shenoy, Capitalmind's research team.

IIP Contracts in December 2016 as Production Slows In Manufacturing Sector

13 Feb 2017Deepak Shenoy1 min read

Quick Facts

What is "IIP Contracts in December 2016 as Production Slows In Manufacturing Sector" about?
What category is this article in?: Economy
Who wrote this article?: Deepak Shenoy, Capitalmind's research team.
When was this article published?: Published 13 February 2017.
How long does this article take to read?: 1 min read
What topics does this article cover?: IIP
What does the "Sectors: Manufacturing hurts" section say?: Growth in Manufacturing was hit as the sector contracted 2% while mining and electricity held the fort.
What does the "Industries: Everything But Metals Hit" section say?: Metals saw an 11% growth after a low December last year, but nearly everything else saw a decline. Bikes/Ship/Rail saw a contraction of 23%, and Leather/Footwear fell 14%.

December hasn’t been kind to the Manufacturing Industry. The Index of Industrial Production (IIP) actually contracted 0.4% in the December month, after a Diwali impacted November showed a large increase in production despite demonetization.

IIP measures number of units manufactured, not the retail sales price. So for steel, it’s about tons produced, not total revenue of steel companies. In effect, it’s more “real” because it removes the impact of inflation.

Sectors: Manufacturing hurts

Growth in Manufacturing was hit as the sector contracted 2% while mining and electricity held the fort.

Industries: Everything But Metals Hit

Metals saw an 11% growth after a low December last year, but nearly everything else saw a decline. Bikes/Ship/Rail saw a contraction of 23%, and Leather/Footwear fell 14%.

(Click for larger image)

Note that none of this has anything related to how markets see things, which currently involves gold rimmed spectacles. The underlying data looks better in Jan for cars (though Bikes from Hero Motocorp and Bajaj still saw double digit percentage declines in Jan) but an industrial recovery will probably take some more time.