Power demand in industrial states signals cooling output

Demand for power in India's top six industrialized states flattened in April and cooled in May, pointing to a potential fall in factory production at the start of the new financial year.

- Rituraj Baruah & Utpal Bhaskar

NEW DELHI:

Data from the Grid Controller of India showed that total daily demand in May across Gujarat, Maharashtra, Andhra Pradesh, Uttar Pradesh, Tamil Nadu and Karnataka fell 5.7% from a year ago. As of 25 May, cumulative demand in these states stood at 59.58 billion units (BUs). In the same month, the HSBC manufacturing Purchasing Managers' Index hit a three-month low, as new orders and production slowed. In April, power demand across the same states was flat at over 75 BUs.

While a break-up of industrial, commercial and household power consumption is not available yet, demand in industrialized states is seen as a proxy for overall industrial power consumption. Since industries account for roughly 45% of total power demand, weakness in these states could indicate a broader slowdown in industry.