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Key Highlights of the June 2009 IIP data & the emerging trend

August 13th, 2009 — economy, IIP

Key Highlights from the June 2009 IIP data and the emerging trend
Note: All data is YoY increase, unless specified

  1. IIP has consistently increased from the past six months from 1.0% in Jan 2009 to 7.8% in June 2009
  2. IIP has jumped from 2.2% in May 2009 to 7.8% in June 2009 vs 5.4% in June 2008
  3. However, on a fiscal YTD basis FY10-YTD IIP is up 3.7% vs FY09-YTD growth of 5.3%, and is higher than the 2.7% for FY09
  4. Significantly, the growth in the capital goods, manufacturing and mining indicies stands out
  5. Capital Goods: After three months of negative growth, the capital goods IIP index grew 11.8% in June 2009 (vs 7.8% in June 2008), however on a YTD basis it is up only 1.0% in FY10 vs 7.9% in FY09
  6. Manufacturing: If the manufacturing IIP index is an true indicator of business activity, June 2009 is the best since March 2008; yet on FY10-YTD growth was at 3.3% vs FY09-YTD growth of 5.8%. The key sectors within the manufacturing space which were significantly up are: basic chemicals & chemical products which has the maximum weightage within the manufacturing sector grew 5%, the machinery (other than transportation equipment) which is the second biggest contributor within the manufacturing sector was up 12%, & basic metal & metal products was up a healthy 10%. Food products (production), with the fourth highest weight in the manufacturing sector, witnessed a degrowth for the third month in a row in the backdrop of the weak monsoon, this obviously has implications for food prices / primary inflation
  7. Mining & Quarrying: The mining IIP index is up a huge 15.4% in June 2009 vs just 0.1% in June 2008, clearly indicating a low base effect play, and a similar trend follows the YTD data, with the index up 7.3% in FY10-YTD as against 4.0% in FY09-YTD

In summary, for June 2009 growth is observed across all sectors when compared to the past six months as well as the previous year. However, on a YTD basis none of the sectors (exceptions: intermediate goods, mining and electricity) have been better in FY10 than in FY09.


Note: The final IIP data for FY09 was also released along with today’s data for June 2009. Hence, the data for FY09 is now final, & this indicates a growth of 2.7% in the General Index, down from 8.5% in FY08 & 11.5% in FY07. With inputs from ASV Krishnan

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