India Steel Market Watch
October 13: In August, the Index of Industrial Production (IIP) jumped up to 6.4% compared to 4.1% in July 2015. It was a 1.3% month-on-month growth in August and the highest in the last three years. Dharmakriti Joshi, Chief Economist, CRISIL explained that, “This was in part due to a strong base effect from last year. However, the August figure for IIP signalled a pick-up in industrial activity.”
Manufacturing activity grew to 6.9% (against 4.6% in July), while mining and quarrying edged up 2.9% and electricity sub-indices marginally increased 2.1% in August.
CRISIL further informed that the manufacturing sector only utilised 75% of its capacity during January-March, 2015, while it was 81.9% in 2011. Capacity utilisation in the manufacturing sector for the first quarter of the current fiscal went down to 71.5% against 74.1 in the previous quarter.
The reason behind the fall was poor demand. The recent industrial outlook survey conducted by the Reserve Bank of India (RBI) also showed continued slowdown in the business expectation index. However, amidst all the challenges, factory output grew to its 36-month high and put the economy in recovery mode.