Monthly Update

IIP – November ‘09

12th January, 2010

• The IIP figure for November stood at 11.7%, taking everybody’s breath away. It stunned everybody
since the market’s expected figures was hovering around 10%.The same index registered a growth of
2.4% y-o-y in Nov’08 whereas a growth of 10.3% (revised) y-o-y in the last month
• It grew at its fastest pace in two years which was the after-effects of the festive season and also strong
global cues. It thus supported the story of improved industrial activity in the last few months and thus, is
an indication of a faster economic recovery in India
• This number will help RBI to decide for an increase in the interest-rate. It is likely to withdraw liquidity
from the market and very soon pull back the monetary and fiscal stimulus on the excellent performance
of the manufacturing and consumer durables segment
• The manufacturing sector grew by 12.7% y-o-y compared to 2.4% in Nov’08 y-o-y on account of
increased manufacturing activities. This sector has seen a huge jump in figures, the reasons being
increase in factory outputs and increase in steel consumption by 8% during the first 9 months of the
current fiscal. Manufacturing grew by 11.1% in the same month of the last year
• The electricity sector increased to 3.3% from 3.1% in Nov’08 y-o-y. It grew by 4.7% respectively in
Nov’09. the numbers posted in this sector are very fluctuating and they have a volatility of 3-4%
• The mining sector, posted a growth of 10.0% against 0.5% in the same month of the last year. It grew
by 8.2% in Nov’09 y-o-y. It has been consistently showing good performance since the last few months
and is expected to continue this trend
• In the use-based category the basic goods, capital goods and the intermediate goods sector registered
a growth of 6.0%, 12.2% and 19.4% y-o-y respectively compared to 2.3%, -2.3% and 2.6% y-o-y
respectively in Nov’08. The growth in the basic goods doesn’t seem to be constant while the capital
goods was driven by an increased demand from the industries
• The consumer goods sector has grown by a satisfactory 11.1% y-o-y compared to its growth of 4.4% in
Nov’08 y-o-y. The sector’s growth was driven by a boost in the consumer durables segment which grew
by 37.3% y-o-y, a huge increase from -4.2% in Nov’08 y-o-y. Increased demand in automobiles, strong
consumption pattern and surge in demand of other durable products led to a significant increase in it. It
was the consumer non-durable goods which did not perform well, registering a growth of 3.1%
compared to a growth of 7.3% in Nov’08

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Monthly Update

Exhibit 1: Sector Breakdown of IIP

Y-o-Y Change (%)

Particulars Weight (%)
Nov-09 Oct-09 Nov-08 YTD FY10 YTD FY09
General IIP 100.0 11.7 10.3 2.4 7.6 3.9
Mining & Quarrying 10.2 10.0 8.2 0.5 8.3 3.4
Electricity 10.5 3.3 4.7 3.1 6.1 2.9
Manufacturing 79.4 12.7 11.1 2.4 7.7 4.0
Food products 9.1 8.9 2.4 3.8 -7.2 -0.4
Beverages, tobacco and related products 2.4 -2.6 0.5 14.5 -2.2 17.9
Cotton textiles 5.5 7.6 10.7 -0.1 3.2 -1.0
Wool, Silk and man-made fibre textiles 2.3 8.4 12.9 -11.4 13.0 -2.8
Jute and other vegetable fibre textiles 0.6 -11.4 -15.5 5.1 -16.2 -3.9
Textile products inc.wearing apparel 2.5 4.3 16.3 6.0 9.9 3.9
wood and wood products 2.7 19.9 18.9 8.7 10.5 -5.7
sPaper & paper products 2.7 7.2 0.7 0.2 2.1 4.1
Leather and leather & fur products 1.1 -4.5 2.4 -13.1 0.9 -5.7
Chemicals & chemical products 14.0 17.0 18.7 -2.1 10.0 3.7
Rubber, plastic, petroleum and coal products 5.7 19.1 14.5 30.7 13.5 1.3
Non-metallic mineral products 4.4 7.4 1.1 2.3 6.4 0.2
Basic metal and alloy industries 7.5 4.1 2.4 5.6 4.8 6.1
Metal products and parts 2.8 28.4 8.8 -8.7 4.0 0.5
Machinery and equipment 9.6 12.9 18.3 5.5 12.1 7.9
Transport equipment and parts 4.0 38.3 18.9 -8.9 13.9 6.7
Other manufacturing industries 2.6 18.0 0.9 -16.9 12.3 -2.1
Use-Based Goods
Basic Goods 35.5 6.0 5.0 2.3 6.1 3.5
Capital Goods 9.7 12.2 12.2 -2.3 7.0 7.5
Intermediate Goods 26.4 19.4 14.3 2.6 11.4 0.1
Consumer Durable Goods 5.1 37.3 21.0 -4.2 21.7 4.3
Consumer Non-Durable Goods 23.2 3.1 8.1 7.3 1.1 6.4

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 (%) (%)

-2
0
2
4
6
8
10
12
14
16
18

-4
-2
0
2
4
6
8
10
12
14
16
18
11/30/2009
11/30/2009

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6/30/2009
6/30/2009
1/31/2009
1/31/2009
8/31/2008
8/31/2008

3/31/2008 3/31/2008

10/31/2007
IIP
10/31/2007

5/31/2007 5/31/2007
Monthly Update

Mining Sector
12/31/2006 12/31/2006

7/31/2006 7/31/2006

2/28/2006 2/28/2006

9/30/2005 9/30/2005

4/30/2005 4/30/2005

(%)

-2
0
2
4
6
8
10
12
-5
0
5
10
15
20

11/30/2009
11/30/2009
07/31/09
6/30/2009
3/31/2009
11/30/2008 1/31/2009
Trend in IIP and its Sectors

7/31/2008 8/31/2008
3/31/2008 3/31/2008
11/30/2007
10/31/2007
7/31/2007
5/31/2007
3/31/2007
Electrical Sector

11/30/2006 12/31/2006
Manufacturing Sector

7/31/2006 7/31/2006
3/31/2006
2/28/2006
11/30/2005
9/30/2005
7/31/2005
3/31/2005 4/30/2005

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Monthly Update

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