Industrial output growth for the month of April 2006 has far exceeded all expectations, helped by a revival in electricity and mining. Index of Industrial Production (IIP) for the month has increased 9.5 per cent from the same month of previous year, according to quick estimates released by the Central Statistical Organisation.

Growth in electricity generation during the month was 5.6 per cent while mining output increased 4.3 per cent over the same month of previous year. As expected, manufacturing turned in a robust 10.4 per cent growth in output.

IIP captures the six basic infrastructure sectors like mining, electricity generation, cement, steel etc covered under the infrastructure index besides manufacturing.

Strong growth in output of capital goods continues, indicating sustained investment demand. Capital goods output jumped 24.9 per cent during the month while output of basic goods went up by 9.1 per cent. Production of intermediate goods was higher by 5.3 per cent.

Consumer demand at the retail level is strong, if the production growth in consumer goods is any indication. Growth in consumer goods output in April was 8.7 per cent with non-durables growing by 10.6 per cent and durables expanding by 8 per cent.

Among various industries, output of basic metals and alloys expanded 20.7 per cent while basic chemicals output was higher by 12.1 per cent. Production of equipment other than transport equipment increased 11.8 per cent while transport equipment showed an increase of 12.7 per cent during the month.

Leather goods reported a decline of 5.6 per cent in output and production of wood and wood products went down by 6.8 per cent. Metal products and paper outputs declined by around a per cent each.

Better than expected industrial growth would is likely to encourage the RBI to go in for another rate hike in July.