Industrial output grew 4.2% in April, rose from 5-month low in March

Industrial output in April showed a growth of 4.2%, bouncing back from a five-month low in March. However, electricity generation contracted for the second consecutive month, while manufacturing and mining experienced around 5% growth. The overall industrial growth in April still remained the second slowest in six months. The National Statistical Office revised the Index of Industrial Production for March, indicating a growth of 2.3%. Despite the rebound, experts highlight the uneven nature of the recovery, with some segments still below pre-COVID levels.

Industrial output grew 4.2% in April, rising from a five-month low in March, with electricity generation contracting for the second month in a row, even as manufacturing and mining grew about 5% in the month.

April’s industrial growth still reflected the second slowest uptick in six months, even as the National Statistical Office (NSO) revised the Index of Industrial Production (IIP) for March to show that production had grown 2.3% instead of the earlier estimate of 1.1%.

Electricity, which contracted 1.6% in March, shrank 1.1% in April, possibly due to unseasonal rains subduing demand. Consumer durables continued to shrink for the fifth month in a row, declining 3.5% in May. Bank of Baroda chief economist Madan Sabnavis said this dip was surprising as demand usually picks up in the post-Rabi harvest season.

The manufacturing uptick was led by infrastructure and construction goods’ production, which surged 12.8%, and consumer non-durables that grew 10.7%. Capital goods’ output grew 6.2% while primary goods and intermediate products recorded a milder rise of 1.9% and 0.8%, respectively, in April.

“The industrial recovery is still uneven and just 4.5% higher in April than the pre-COVID level of February 2020. Even at the disaggregated level, the output of a couple of segments is below the pre-COVID level,” said Sunil Sinha, principal economist at India Ratings and Research.