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India's eight core infrastructure sectors grew by 1.8 per cent in November, slowing sharply from last year due to weaker output in crude oil, natural gas, refinery products and electricity. While growth improved sequentially from October's contraction, overall momentum remained subdued. During April & November, core sector growth stood at 2.4 per cent, lower than the previous year. Cement and fertiliser output showed strength, while coal and steel moderated. Economists expect industrial production growth of 3.5 & 4.5 per cent for the month.
India's eight core infrastructure sectors recorded a growth of 1.8 per cent in November, marking a sharp slowdown from the 5.8 per cent expansion seen in the same month last year. The moderation was largely due to lower production in crude oil, natural gas, refinery products and electricity, as per official data released in the past week. Advertisement
Despite the year-on-year slowdown, the data showed an improvement on a sequential basis. The combined output of the eight core industries had contracted by 0.1 per cent in October, indicating a marginal recovery in November.
The core sector comprises coal, crude oil, natural gas, petroleum refinery products, electricity, fertilisers, cement and steel, which together account for a significant share of the Index of Industrial Production (IIP). During the April-November period of the current financial year, these sectors expanded by 2.4 per cent, lower than the 4.4 per cent growth recorded in the corresponding period of the previous fiscal.
Sector-wise performance remained mixed. Growth in coal and steel production moderated in November, reflecting softer demand and operational constraints. In contrast, fertiliser output rose by 5.6 per cent, while cement production registered a strong increase of 14.5 per cent, supported by improved construction activity after the festive season.
Aditi Nayar, Chief Economist at ICRA Ltd, indicated that core sector growth improved in November following the festive period but continued to remain subdued. She noted that the month-on-month improvement was driven by most sectors, with cement showing a particularly sharp acceleration compared to October.
She further pointed out that due to base effects and changes in the festive calendar, it would be more appropriate to assess the combined performance of October and November. On this basis, average growth stood at 0.8 per cent, significantly lower than the 3 per cent average growth recorded during the first half of the current fiscal.
Based on core sector trends and other high-frequency indicators, ICRA expects the Index of Industrial Production to grow in the range of 3.5-4.5 per cent for November, reflecting modest industrial momentum.
Source PTI
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