What were the key highlights of the IIP number for October 2020 that was announced by the government on Friday?

The IIP number for October 2020 came in at 3.63%. That is a sharp gain from September when the IIP had turned positive after a stretch of 6 months of negative growth in the current year. Here are the highlights of the IIP announcement for October 2020.

· India’s industrial activity or IIP touched an 8-month high of 3.63% in October, led by gains in manufacturing and driven by higher demand for consumer goods.

· In addition, the September 2020 IIP figure was also upgraded from 0.24% to 0.49% giving hope that the October number could also eventually be upgraded.

· There was significant expansion in consumer goods, electricity, and infrastructure goods even as the revival was largely triggered by festive season demand and low base.

· It maybe recollected that IIP had contracted by 6.6% in the corresponding October 2019 of last year; even as the recovery comes after months of negative growth.

· The indications were already there in the form of growth in e-way bills, GST collections, and automobile sales and to that extent was not much of a surprise.

· However, rating agency ICRA has warned that there could be a slide in IIP growth in November as is evidenced by the core sector numbers.

· Interestingly, the good news was that manufacturing sector grew positively for the first time since Feb-20, expanding by 3.5% pulling the overall IIP towards it.

· Within the manufacturing space, the consumer durables sub-sector posted double-digit expansion led by festival demand. Even consumer non-durables saw growth in Oct-20.

Overall, it has been positive IIP numbers and it remains to be seen if it can be reasonably sustained.