Average project cost, as measured by ERIL Index of Cost of Project Inputs, increased nominally during January, ending decline of previous two month. Project cost escalation on y-o-y basis worked out to 0.7 per cent during the months, a half of an already subdued 1.6 per cent during the comparable period of 2013-14. WPI-based inflation for all commodities showed a decline during January, after over five years of positive growth. The combined WPI for manufactured products that sets the tone for project investment increased 1 per cent annually.
Computed by Economic Research India Pvt. Ltd, ERIL Index measures project cost escalation in terms of WPI of material inputs relevant in project construction.
Capital goods production increased 4.8 per cent during April-December Among the other material inputs in project execution, cement production increased by 7.9 per cent. Alloy and non-alloy steel production was up by 1.6 per cent during this period. Machinery export increased by 16 per cent, whereas their import was up by 2 per cent.
Trends during January
The aggregate WPI for non-metallic mineral products rose by 0.6 per cent during the month due to higher price of grey cement (2 per cent) and asbestos corrugated sheet, glass bottles and bottle ware and lime (1 per cent each). However, the price of bricks and tiles declined 4 per cent, marbles 3 per cent and slag cement 1 per cent.
The total WPI for basic metals, alloys and metal products declined by 0.1 per cent due to 5 per cent decline in price of slabs, 4 per cent in pig iron, 2 per cent each in zinc and steel structures; and 1 per cent each in ferrosilicon, steel rods, CRC, angles, rebars, silver and HRC. However, the price of iron castings was up 4 per cent, nuts, bolts, screws and washers 2 per cent, and pipes, tubes, rods and strips, gold and gold ornaments, sheets, plates and billets 1 per cent each.
The combined WPI for machinery and machine tools increased by 0.2 per cent following higher price of heating elements (5 per cent) and industrial furnaces, electric motors, thresher, electric generators, lamps, electronic PCB, micro circuit, washing laundry machines, earthmoving machinery, and ball and roller bearings 1 per cent each. However, the price of heat exchanger dropped 6 per cent over the month.
ERIL INDEX OF COST OF PROJECT INPUTS: JANUARY 2015
Wholesale Price Index: 2004-05=100
|Index||Y-o-Y Increase (%)||Increase Since March (%)|
|Structural clay products||190.7||5.8||7.5||3.4||7.5|
|Cement & Lime||170.0||3.4||-2.4||3.6||-4.6|
|Basic metals, alloysmetal products||164.7||-1.0||0.7||-1.7||1.0|
|Machinery &machine tools||135.2||2.1||2.4||1.5||2.3|
|Electrical Accessories,wires & cables||157.3||3.8||4.8||3.8||8.3|
|Transport equipment& parts||136.7||0.7||3.3||0.7||2.7|
|Composite ERIL Index
for project inputs