IN: Industrial Production


Mon Oct 12 07:00:00 CDT 2015

Consensus Actual Previous Revised
Change Y/Y 4.8% 6.4% 4.2% 4.1%

Highlights
The goods producing sector had a surprisingly respectable August. A 6.4 percent annual rise in output was up more than 2 percentage points from its July rate and comfortably above the market consensus. Indeed, this was the fastest growth since October 2012.

Moreover, the pick-up in the headline rate was essentially matched in the key manufacturing sector where growth climbed from 4.7 percent to 6.9 percent. Elsewhere, output was up 3.8 percent in mining and quarrying and 5.6 percent in electricity.

Combined with the acceleration just reported in September inflation (see today's calendar entry) the buoyancy of industrial production should help to dampen any speculation about another monetary ease from the RBI anytime soon.

Definition
Industrial production index measures changes in the volume of production in the mining, manufacturing and electricity sectors. The data are not seasonally adjusted.

Description
Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that will not lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.

The index is a quantitative index with the production of the items being expressed in physical terms. The Index is compiled by taking into account the quantities of items produced during the current month, compared with the average monthly production in the base year. Selection of items is based on the total production of the items as the primary (main) product as well as secondary (by) product. Data are available monthly within six weeks of reference month.