Capital Market has conducted a poll amongst economists across leading banks, rating agencies, financial advisories and brokerages for May 2024 IIP growth projections. The results of the poll as indicated by the median of IIP growth forecasts from economists, shows that industrial production growth would remain steady at 5.0% in May 2024 as against 5.0% growth recorded in April 2024.

Economists expect IIP growth to be in the range of 4.8-6.0% in May 2024. The median of various IIP growth forecast received from economists stood at 5.0%, while the average was higher at 5.3% for May 2024.

Major Indicators for IIP: May 2024

The output of eight core industries, with a combined weight of 40.3% in the Index of Industrial Production (IIP), increased 6.3% in May 2024 over May 2023. The output of electricity generation increased 12.8%, coal 10.2% and steel 7.6%. Further, the output of natural gas moved up 7.5% and petroleum refinery products 0.5%. However, the output of fertilizers declined 1.7%, crude oil 1.1% and cement declined 0.8% in May 2024. The output of the core sectors moved up 6.5% in April-May FY2025 compared with the 4.9% growth in April-May FY2024.

During May 2024, the eight-core infrastructure sector would contribute overall IIP growth with the positive share of 273 bps, based on 40.3% weight and 6.3% growth in output recorded for the month. The contribution of the eight-core infrastructure sector is showing a marginal decline in contribution to the IIP from contribution of 288 bps in April 2024.

Index of industrial production: April 2024

India's industrial production (base year 2011-12=100) increased 5.0% in April 2024, maintaining above 5% growth for third straight month. The manufacturing sector output moved up 3.89%, while the mining sector output increased 6.69% in April 2024. Further, the electricity generation increased 10.24% contributing to the overall rise in industrial production in April 2024.

As per the use-based classification, the output of primary goods moved up 7.03% in April 2024, while the output of capital goods increased 3.14% in April 2024. Further, the production of intermediate goods rose 3.22% and infrastructure/ construction goods gained 7.95% in April 2024. Within the consumer durables, the output of consumer durables increased 9.81%, but that of consumer non-durables fell 2.39% in April 2024.

In terms of industries, 16 out of 23 industry groups in the manufacturing sector have shown positive growth during the month of April 2024 as compared to the corresponding month of the previous year.

India's industrial production increased 5.90% in April-March FY2024. The manufacturing sector output increased 5.48%, while the mining sector output gained 7.50% in April-March FY2024 contributing to the overall decline in industrial production. Further, the electricity generation also moved up 7.05% in April-March FY2024.

World Industrial production growth: April 2024

As per the data compiled by the Netherlands Bureau for Economic Policy Analysis, the world industrial production increased 2.2% in April 2024 compared to 1.3% rise in April 2023. The industrial output in emerging economies improved 4.8%, while industrial output in advanced economies dipped -0.6% in April 2024 over April 2023.

The industrial production of the Euro area declined -2.3% and US eased -0.7%, while that of Japan declined -3.2% in April 2024 over April 2023.

Among the emerging economies, the industrial output of China increased 7.3%, while that of emerging Asia excluding China moved up 6.1% in April 2024. The industrial production of the Eastern Europe rose 3.5% in April 2024.

Outlook

Industrial output growth continued to improve at healthy pace of above 5% for third straight month at 5% in April 2024 with healthy growth for all three sub-segments. As many as 17 out of 23 manufacturing industries have recorded positive growth in the output for April 2024. The growth is expected to remain steady as indicated by early indicators such as eight core infrastructure growth, exports, port traffic, PMI and diesel consumption etc. The south-west monsoon has exhibited sharp pick in the last week of June and early July 2024 which augurs well for agriculture and rural demand. The crop sowing has also jumped sharply by more than 14% over last year with the revival of monsoon rainfall. Investment activity is likely to remain on track, with high capacity utilisation, healthy balance sheets of banks and corporates, government’s continued thrust on infrastructure spending, and optimism in business sentiments.