IN: Industrial Production

Thu Nov 12 06:00:00 CST 2015

Consensus Actual Previous Revised
Change Y/Y 4.7% 3.6% 6.4% 6.26%

Following a surprisingly strong (albeit marginally weaker revised) performance in August the goods producing sector cooled in in September. A 3.6 percent yearly rise in output was down from 6.3 percent in mid-quarter and well short of market expectations. It was also the slowest rate in four months.

The deceleration in the key manufacturing sector was sharper still and production growth here slumped from 6.9 percent to 2.6 percent, easily more than reversing August's spurt.

However, if the slowdown in economic growth raises the chances of additional monetary easing from the RBI over the medium-term, it will probably have little impact upon the Bank's policy deliberations next month. For now the central bank looks happy enough to maintain the status quo and ensure that its inflation targets are not compromised.

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

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.