Acuité Ratings & Research comments on IIP Oct'22

Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research

"The IIP print for Oct-22 has come at an eleventh-month low which is somewhat surprising given the readings coming consistently from PMI Manufacturing. Such a weak YoY figure at -4.0% has come after a fairly long time since the impact of the first wave of the pandemic was seen in the period Mar-Aug'20. On a sequential basis, the contraction of -2.9% is not consistent with the typical moderate growth behaviour that is seen in IIP during the previous years.

While the volatility in IIP data is baffling, it does validate an underlying weakness in domestic industrial activity due to the uncertain global environment. Exports have already seen a significant decline and the manufacturing output levels indicate a further weakness on that count. Further, the consumer goods industry output is witnessing a double-digit contraction YoY which can be due to two factors - one, a higher proportion of imported goods being used to address consumer demand and second, the still fragile nature of rural demand."

Source : Equity Bulls

Keywords

IIP October2022 India Economy IndustrialActivity AcuiteRatings