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IIP May 2011 at 5.6%


The Index of Industrial Production, something I absolutely detest for the massive revisions and complete WTF in comparison with other economic indicators. But this is the obligatory post on the graphs if only to show you how wild this "index" is.

May 2011 elements came in at 5.6% for the overall index (growth over last year), with mining at 1.4%, Manufacturing at 5.6% and Electricity at 10.29%.


(Click image for a larger graph)

Revisions: the April data, which initially came in at 6.34% has been revised to 5.77%. Feb IIP was increased marginally upwards from 6.48% to 6.67%.

(Note: the initial release for Feb was actually 3.56%, but they have changed the base year from 93-94 to 2004-05, and changed element weights. The new series shows more growth)

When we look at the Use based indexes and growth:

IIP Use Based

(Click image for larger graph)

If we were to believe this data, then there’s a slowdown of sorts in Intermediate goods, consumer durables, and capital goods. The rest are benign.

But you can’t trust this because they’ll revise the May figures. Twice. Once next month and once in October. When we look at the same data then you might notice that the intermediate goods piece was really strong, something like 10% or more. Our statistical department SUCKS.

Having said all of that, the revisions this time were probably the least botherable. I wonder if data collection is this bad for initial figures or is it just picking numbers out of random body part? Still, it’s all we have. I will look at Ajay Shah’s seasonally adjusted data to be refreshed to look deepr.


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