The uptrend in industrial output continued in May with output up 2.7% YoY and 0.6% on a MoM seasonally adjusted basis. This was higher than our (1.6%) as well as consensus expectations (1.4%) but lower than the 1.3% s.a growth last month. Similar to trends seen earlier this year, the April data was revised, BUT this time the revision was downwards from 1.4% to 1.2%. The revision was led by capital goods (from -1.3% to -7.3%) which raises doubts on the much awaited investment recovery.
On a sectoral basis, growth was led by mining up 3.7%, electricity up 3.3% and manufacturing up 2.5%. Worrying sign is the continued contraction in capital goods (-3.6%) for the third month in a row, (ii) While consumer goods came back into the black (1.2%) after three months, consumer non-durables remained in the red with the key drag being food products and beverages.