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The Index of Industrial Production (IIP) growth slowed down to 4.4% in March 2018 from 7%+ in the previous three months, as the favourable base effect dissipated in the month. The number was below our estimate/market consensus of a 5.6%/6.2% rise.
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Lower II P growth can be primarily attributed to the manufacturing sector, where growth slowed down to 4.4% in March 2018 from an average of 9.1% in the previous three months. The deceleration was broad-based, with ~51% of the sector (v/s 28% in February 2018) reporting growth of less than 5%. 12 of the 23 industries within manufacturing witnessed a contraction in output.
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As per use-based classification, output of capital goods declined by 1.8% YoY in March after growing in double-digits over the previous three months. Growth in the output of consumer durables was also weak at 2.9%