India's index of industrial production (IIP) has witnessed a robust growth of 4.2% in June compared to the previous year, marking an impressive streak of 19 consecutive months during which the nation’s factory output has increased year-over-year. This data was released by the National Statistical Office (NSO) on Monday, providing a clear indication of the resilience and upward trajectory of the Indian manufacturing sector. In a detailed breakdown of the figures, the NSO noted that the IIP for May was revised to reflect a 6.2% increase on a year-on-year basis.
Notably, during the quarter spanning from April to June, the IIP recorded a year-over-year growth of 4.7%, further underscoring the positive momentum in manufacturing output during this period. Analyzing the components of industrial production reveals that among various categories, the manufacturing output experienced a 2.6% rise in June year-over-year.
Furthermore, the mining sector performed exceptionally well, boasting a remarkable 10.3% increase, while electricity production rose by 8.6% compared to the same month last year, as reported by the NSO. Particularly noteworthy are the gains within certain technology-driven sectors. The manufacture of computer, electronic, and optical products surged by 10.7% in June on a year-over-year basis, while the output of electrical equipment soared by an astounding 28.4%.
These figures highlight the increasing reliance on technology and electronics in driving industrial growth. Conversely, the pharmaceutical sector faced challenges, with the output of pharmaceuticals, medicinal chemicals, and botanical products declining by 2.9% in June on a year-over-year basis, as noted by the NSO.
This decline points to potential headwinds that the sector may need to navigate moving forward. In other broad categories, the output of capital goods showed a modest increase of 2.4% in June compared to the same time last year. The production of consumer durables also experienced substantial growth, with an increase of 8.6%.
Additionally, the output of infrastructure and construction goods rose by 4.4% in June on a year-over-year basis, indicating ongoing investments in critical sectors of the economy. India's manufacturing sector continues to exhibit robust growth, as evidenced by recent purchasing manager index (PMI) reports.
In July, the manufacturing PMI for India inched slightly lower to 58.1, down from 58.3 in June. This decline, albeit modest, underscores a strong performance well above the critical 50-mark that differentiates growth from contraction, as highlighted by S&P Global in early August. Amid these observations, S&P Global emphasized the presence of "buoyant demand conditions" within the factory sector.
The strong PMI figures signal that India's manufacturing sector has been experiencing persistent and solid growth trends since mid-2021, reflecting a dynamic economy poised for further advancements..