Industrial Output in India Rises to Three-Month High

NEW DELHI (Reuters) – India’s industrial output rose to a three-month high of 3.5% year-on-year in October, supported by increased consumer durables and garment manufacturing during the festival season, according to government data released on Thursday.

The rise matched the 3.5% forecast in a Reuters poll of economists and was higher than the 3.1% growth in the previous month.

Manufacturing output increased by 4.1% year-on-year in October, compared to a 3.9% growth the month before.

Electricity generation grew by 2% year-on-year in October, an improvement from 0.5% in September, while mining output saw a gain of 0.9% year-on-year, up from 0.2% growth a month earlier.

Garment manufacturing surged by 7.1% year-on-year in October, in sharp contrast to a mere 0.1% growth the previous month, boosted by a surge in export orders as global retailers intensified shipments from India amid the political crisis in Bangladesh.

Consumer durables output, which encompasses household appliances and vehicles, increased by 5.9% in October compared to 6.5% in the prior month, while capital goods output rose by 3.1% year-on-year in October, down from 3.6% in September.

“There does seem to be the festival effect here which should pick up further in November,” stated Madan Sabnavis, an economist at Bank of Baroda (NS:BOB).

India’s festival season spans from mid-September to the end of November.

During the April-October period, industrial output saw a 4% increase, compared to a revised 7% growth the year before.

“Given the favorable base, we expect the year-on-year IIP growth to accelerate to a more palatable 5%-7% in November 2024,” anticipated Aditi Nayar, an economist at ICRA.