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Industrial Activity to continue expansion: ZyFin

ZyFin BCI, lead indicator of IIP at six-month high, registers second straight increase

Business Cycle Indicator (BCI) by ZyFin Research, for January 2014, a lead indicator to the Index of Industrial Production (IIP), has registered a year-on-year growth of 4.8% in January as against 4.7% in December suggesting an expansion in industrial activity in February. This improvement, which follows the uptick in December, suggests that industrial activity has bottomed out.

Based on the latest estimate of the IIP, industrial activity continued to decline in December.

Data shows IIP will reflect a recovery in industrial activity from January.

BCI indicates the state of the Indian business cycle more than two months prior to the release of IIP data and thereby allows advanced detection of turns in business cycle. A three-month uptrend in the BCI signifies an improving business cycle and vice versa.

The key highlights of the ZyFin Research Business Cycle Indicator for January 2014 are:

* The BCI grew by 4.8% in January 2014 as compared to 4.7% in December. This is the highest growth rate recorded since July 2013.

* Improving trends have been observed in economic indicators, such as revenue from railway freight, electricity generation, domestic air travel and external sector.

* Concerns still remain over rising non-plan expenditure and constrained money supply in the economy.

Debopam Chaudhuri, Vice President of Research and Development, ZyFin Research, said, ?Consumer confidence has been inching up for the last three months as measured by ZyFin?s Consumer Outlook Index. This further lends support to the bottoming out of industrial activity.?

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First published on: 13-02-2014 at 13:40 IST
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