IIP For February Contracts At -1.9%

The central statistical office today released the Index of Industrial Production (IIP) data for the month of February 2014. IIP data shows the actual position of the manufacturing industry in a country. The data shows that, the IIP for the month for February 2014 stood at 172.8 against 182.20 in January, which shows it contracted to -1.9% against 0.8% in January.

On individual industry-wise, 13 out of 22 industries in the manufacturing sector showed negative growth during the month of February 2014 against the corresponding month of the previous year. The Basic Goods growth was at 3.9% in February'14 against 0.9% in January'14. Interestingly, electricity industry grew at 11.5% during February'14 against 6.5% in January'14, while mining growth for February'14 stood at 1.4% compared to 0.7% in January'14. However, the negative growth has been seen in capital goods (-17.4%), Consumer durables (-9.3%), and Consumer non-durables (-1.2%).

Previously, HSBC India manufacturing Purchasing Managers Index (PMI) for March too stands at 51.3, showing a contraction from the previous month PMI of 52.5, signaling a weaker improvement in the business conditions of goods production in India. Coupled with the lower than expectation IIP number may change the sentiments towards northward side despite of today’s trade deficit for March 2014 USD 138.6 billion lower against USD 190.9 billion in February’14 indicating positives for the domestic economy.