IIP Growth in June 2009

The IIP index for the month of June 2009 stands at 290.2. This is an advance estimate subject to two revisions. When compared to last year, this amounts to a 7.8% jump, but compared to the previous month is a lesser 3.4% jump.

Yet, if this figure does not get revised seriously downwards and the index sustains and grows in the coming months, it does represent a possible positive for the economy. But as of now i remain a little skeptical. Lets examine why..

The figures for IIP for the last 15 months are given below. Note that figures are revised twice, so figures upto April 2009 are final. The figures of May and June are subject to revision.

A line chart followed by the detailed table are below:

(Click on the images to get a sharper view)

Note that the spike in March 2009 seems to be an outlier. In March 2009, electricity, mining and manufacturing all spiked up. Mining has clearly not sustained its spike after March. The interesting thing is that the advance figures for manufacturing in June 2009 show another spike but electricity dips. How is that possible? Does it mean that we have used less electricity for manufacturing more? Note mining has risen ever so slightly in June 2009. So what is the explanation?

I for one would wait to see if this "stupendous" performance repeats itself in the coming months. I would also wait to see if the figures for June 2009 get revised downwards (two revisions are forthcoming). Only then will i jump to conclusion that there has been an improvement in the IIP.