Index of Industrial Production (IIP) recorded 2.4% growth in May 2012 as against 6.2% in May 2011

Index of Industrial Production (IIP) recorded 2.4% growth in May 2012 as against the market expectations of 1.7% growth. The April IIP was revised lower to -0.9% from earlier estimate of 0.1%. The slight growth in IIP was attributed to growth registered in the electricity and consumer durables sector.  Industrial growth had stood at 6.2 per cent in the corresponding month in 2011.

During the first two months of the 2012-13 fiscal, April-May, the industrial growth rate fell sharply to 0.8 percent from 6.2 percent in the same period of 2011-12. Mining sector witnessed a fall of -0.9% compared to 1.8 percent growth in May 2011. The output of the capital goods sector (machinery and equipment) dipped by 7.7 percent in May 2012 as against a growth of 6.2 percent in May 2011.

However electricity sector registered a growth of 5.9%. Power generation had witnessed a slower growth of 5.9 percent during May, compared to 10.3 percent. Manufacturing sector which constitutes over 75 percent of the index, did not perform well and grew a mere 2.5 percent in May 2012 as against 6.3 percent in May 2011

Consumer durables production showed a faster growth rate of 9.3 percent in May 2012 as compared to 5.1 percent in May 2011. The consumer non-durables segment output growth declined sharply and remained flat at 0.1 percent, as against 9 percent.

Headline inflation in May moved to 7.55 percent as both food and fuel prices increased. Consumer price inflation, which is an indicator of retail price rises, remained unchanged at 10.36 percent in May 2012.