Situation
On an annual basis ( Feb’07 as compared to Feb’06)
Overal Production grew by 3.4% p.a in Feb’07 (as compared to a 2.7% p.a in Jan’07). Within this :
- Output in the manufacturing sector grew by 2.8%.
- Output of utilities grew by 9.6 % .
- Output of mines grew by 3.0 %.
On a monthly basis
Production ( IIP) grew by 1.0 % in February after a decrease of 0.3 % in January and a rise of 0.8 % in December. Within this :
- Output in the manufacturing sector gained 0.4 % in February and was led by increases in motor vehicles and in high-technology goods.
- Output of utilities grew by 6.7 % in February. ( colder than average temperatures boosted production at both electric and natural gas utilities)
- The output of mines grew by 0.1 %.
Conclusion
( click / double click on picture for a clearer visual)
The New Orders Index has been dropping since March’06 and has had a sharp drop since Nov’06.
IIP has grown faster in Feb’07 ( as compared to Jan’07) - reflecting higher new orders in Nov’06 - Dec’06 . The same logic suggests drops in IIP ( below 3.00% p.a growth) for the coming 2-3 months. ( see visual )
IIP looks likely to have a range of a 0% - 3.00% p.a growth until mid’07. ( could be heading down towards mid’07) - and could contract further to a negative ( - 5%) p.a towards early/mid 2008.
It does look like 2007 - 2008 will see a very low growth rate - towards a contracting rate, for the IIP.