Core sectors’ output up 3.1% in October; best performance in three months

Coal, cement production levels hit four-month highs, but electricity generation slips to its weakest in seven months; fertiliser output growth eased to a five-month low of 0.4%

Output in India’s eight core infrastructure sectors, that constitute a tad over 40% of industrial production, recovered to rise 3.1% in October, the best performance in three months in terms of growth as well as absolute levels.

The Index of Core Industries (ICI) which had slumped to a 10-month low in September, recovered 3.9% on a sequential basis to a provisional number of 161.3 in October. The Commerce and Industry Ministry also revised upwards the core sectors’ growth in September to 2.4% from a previously estimated 2%. This was preceded by a 1.6% contraction in the index in August, the first such shrinkage in three and a half years.

Six of eight sectors recorded an uptick in October, led by coal which grew at a four-month high pace of 7.8%. Refinery products grew 5.2%, a tad slower than the 5.8% rise in September, while Steel grew at the fastest pace in three months at 4.2%.

Electricity generation grew 0.6% from last October, inching up from September’s 0.5% year-on-year growth. However, generation levels were the lowest in seven months in absolute terms.

Barring electricity, the other seven core sectors recorded a sequential rise in their absolute output levels, with steel production at a seven-month high, and cement and coal at four-month peaks.

Cement production grew 3.3% in October, while fertilisers output rose a mere 0.4%, the slowest in five months. Natural Gas production contracted year-on-year for the fourth straight month, declining 1.2% in October. Crude oil output also tanked for the sixth month in a row, with October recording the sharpest decline of 4.8% in this six-month streak.

“The construction related indicators reported mixed trends, with the growth in steel production improving, while that in cement output deteriorating between these months, although both remained muted,” noted ICRA senior economist Rahul Agrawal, adding that overall core performance was also mixed with half the sectors seeing growth improve, while half slowed down.

Published - November 29, 2024 07:38 pm IST