IIP: Top 5 Industries least damaged by COVID 19
Yesterday, the Government released the IIP report. IIP is the Index for Industrial production covering three broad categories – Manufacturing, Mining and Electricity. The weightage for Manufacturing is 77.6%, Mining is 14.4% and Electricity is 8%. This does not look at sales or revenues, it just looks at production (Units, Volumes etc).
IIP: Top 5 least affected by COVID 19
1. Manufacture of pharmaceuticals, medicinal chemical and botanical
products
This has grown 2.5% over last May, the only industry showing positive growth. It has 5% weightage in the Industrial economy of the country.
Bharat Biotech for example is testing India’s Vaccine against COVID-19
2. Electricity
While this has not grown, it has fallen by 15%, much lesser other industry sectors. It has 8% weightage in the industrial economy of the country
3. Manufacture of food products
While this has not grown, it has fallen by 19%, much lesser other industry sectors. It has 5% weightage in the industrial economy of the country
4. Mining
While this has not grown, it has fallen by 21%, much lesser other industry sectors. It has 14% weightage in the industrial economy of the country
5. Manufacture of chemicals and chemical products
While this has not grown, it has fallen by 22%, much lesser other industry sectors. It has 8% weightage in the industrial economy of the country
So, there are about 5 sectors which make up for 40% of the Industrial economy that are 80% or above of 2019 May. This is not bad news at all.
The big industrial sectors that are struggling include Manufacture of Basic metals which makes up for 13% of the Industrial economy and is still 43% lower than May 2019. Automobiles which makes up for 7% of the Industrial economy and is still 80% lower than May 2019. The Good news is Automobiles had a much better June, so this too is improving
IIP: Does this mean good news?
Looking at the data, it is clear that compared to April, things had improved in May and even more so in June (for which we have data from other sources). While the number of Corona cases continue to grow and sometimes we face setbacks like the Bajaj Factory impacted by Corona, overall the economy is slowly making progress to recovery. Should Corona cases peak in the next month or so, the recovery will be even faster and we should be in good shape going forward
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