The Index of Industrial Production (IIP) is a key economic indicator that measures the performance of various sectors in India’s industrial economy. Released on the 12th of every month, the IIP provides insights into the country’s manufacturing, mining, and electricity production. The latest Quick Estimates for July 2024 show steady industrial growth, with a 4.8% increase compared to the previous year.
Let’s take a closer look at the highlights of the latest IIP data and what it means for India’s economy.
Key Highlights of IIP for July 2024
The IIP growth rate for July 2024 stands at 4.8%, slightly improving from 4.7% in June 2024. This indicates continued industrial recovery and stable economic momentum.
Sector-Wise Growth in July 2024
The three major industrial sectors—Mining, Manufacturing, and Electricity—showed the following growth rates:
- Mining: 3.7% growth
- Manufacturing: 4.6% growth
- Electricity: 7.9% growth
The overall Quick Estimate of IIP for July 2024 stands at 149.6, compared to 142.7 in July 2023, reflecting a year-on-year increase.
Top Performing Industries in Manufacturing
Within the manufacturing sector, the three strongest contributors to growth were:
- Manufacture of basic metals – 6.4% growth
- Manufacture of coke and refined petroleum products – 6.9% growth
- Manufacture of electrical equipment – 28.3% growth
This suggests strong demand for metals and petroleum products, while electrical equipment saw a significant boost, possibly driven by increased investments in energy and infrastructure projects.
IIP Growth Based on Use-Based Classification
Industrial production can also be classified based on the intended use of goods. Here’s how different categories performed in July 2024:
| Category | IIP Index (July 2024) | Growth Rate (vs July 2023) |
|---|---|---|
| Primary Goods | 150.1 | 5.9% |
| Capital Goods | 114.4 | 12.0% |
| Intermediate Goods | 164.3 | 6.8% |
| Infrastructure/Construction | 178.7 | 4.9% |
| Consumer Durables | 126.6 | 8.2% |
| Consumer Non-Durables | 146.8 | -4.4% |
The strong 12.0% growth in Capital Goods indicates increased industrial investments, while Consumer Durables (up 8.2%) reflect rising demand for household goods. However, Consumer Non-Durables saw a decline of -4.4%, signaling weaker demand for everyday essential items.
Top Contributors to IIP Growth by Use-Based Classification
The three biggest contributors to IIP growth in July 2024 were:
- Primary Goods
- Intermediate Goods
- Consumer Durables
Revisions and Data Updates
Each IIP estimate undergoes revisions based on updated data from various industries. Along with the Quick Estimates for July 2024, revisions were made for the previous months:
- June 2024 IIP: First revision (94% data response rate)
- April 2024 IIP: Final revision (96% data response rate)
These revisions ensure accuracy as more data becomes available from industries.
What’s Next?
The next IIP release, covering August 2024, will be published on Friday, 11th October 2024. This will provide further insights into India’s industrial performance and economic trajectory.
The 4.8% growth in IIP for July 2024 signals steady industrial expansion, with the Manufacturing and Electricity sectors leading the way. Capital Goods and Consumer Durables showed strong demand, while Consumer Non-Durables declined, indicating shifting market trends.
While India’s industrial sector is growing, challenges like fluctuating consumer demand and sector-specific variations need close monitoring. Future IIP reports will help track the long-term trajectory of India’s economic recovery and industrial strength.
