THE COUNTRY’S industrial output rose much faster than expected at 17.6% in April from 13.5% a month earlier led by growth across all sectors. CNBC-TV18 had expected IIP to come in at 14%.
March's annual growth rate has been revised upwards to 13.9% from 13.5%.
The manufacturing sector in April grew 19.4% as against 0.4% a year earlier, while consumer durables surged to 37% versus 17.6% in April 2009. The mining sector’s growth came in at 11.4% in the month versus 3.4%. There was strong growth in capital goods sector, which rose 72.8% from negative 5.9% on year-on-year basis and the consolidated non-durable jumped 6.6% as against negative 10.5%.
Commenting on robust capital goods numbers, Jehangir Aziz Chief Economist at JP Morgan said, “If you would look at the numbers of last time on a seasonal adjustment basis, capital goods activity actually fell. So this (72.8% growth) is a good sign of the start of an investment cycle. This turnaround is earnest and I see momentum continuing in the month of May.”
However, the consumer durable numbers, according to Venugopal Dhoot Chairman and Managing Director of Videocon, were not very surprising. “Since November the growth has been over 30%. In January it was 46% and now it is 37%. The industry has taken good shape and credit goes to the stimulus package announced by the government in January 2009. Besides, the demand is good, interest rates are lucrative and the government had spent well on the below poverty line (BPL) bracket,” he reasoned.
You will see that in July-August the growth in consumer durables will be similar to capital growth industry if there are good rains, he added.
On the outlook for FY11, Mridul Saggar, Chief Economist, Kotak Institutional Equities, said, “There is a possible upside considering that much growth in consumer durables has come from not much support from bank support to retailers. However, we need couple of more months to see if the actual investment activity has accelerated at grassroot level and to say if 10% growth will continue. But we are still skeptical about global scenario.”
Source http://www.moneycontrol.com/news/economy/april-industrial-production-grows-176-vs-135-%28mom%29_463628.html
However, the consumer durable numbers, according to Venugopal Dhoot Chairman and Managing Director of Videocon, were not very surprising. “Since November the growth has been over 30%. In January it was 46% and now it is 37%. The industry has taken good shape and credit goes to the stimulus package announced by the government in January 2009. Besides, the demand is good, interest rates are lucrative and the government had spent well on the below poverty line (BPL) bracket,” he reasoned.
You will see that in July-August the growth in consumer durables will be similar to capital growth industry if there are good rains, he added.
On the outlook for FY11, Mridul Saggar, Chief Economist, Kotak Institutional Equities, said, “There is a possible upside considering that much growth in consumer durables has come from not much support from bank support to retailers. However, we need couple of more months to see if the actual investment activity has accelerated at grassroot level and to say if 10% growth will continue. But we are still skeptical about global scenario.”
Source http://www.moneycontrol.com/news/economy/april-industrial-production-grows-176-vs-135-%28mom%29_463628.html
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