Much in tune with the Economic Survey of 2022-23, that has painted an optimistic picture of the economy, the output of the country’s eight core industries grew to a three month high of 7.4 percent in December 2022. 

Their overall performance was bolstered by a strong show from coal, steel, cement and electricity sectors, official data released on Tuesday showed.

This output growth performance was much higher than the 4.1 percent growth recorded in December 2021 and also the revised 5.7 per cent growth in November 2022.

The eight core industries are coal, fertilizers, steel, cement, electricity, crude oil, natural gas and refinery products. 

Movers and shakers

For the month under review, seven of the eight core sectors were in positive territory. Only crude oil saw a contraction of 1.2 percent. Output growth recorded by coal stood at 11.5 per cent, fertilizers  at 7.3 per cent, steel at 9.2 per cent, cement at 9.1 per cent and electricity at 10 per cent.  While natural gas saw an output growth of 2.6 percent, refinery products output grew 3.7 percent.

For the April-December 2022 period, the eight core industries’ output grew 8 per cent, lower than 12.6 percent growth recorded in the same period last year. 

The Commerce and Industry Ministry has also now revised upwards the final growth rate of eight core industries for September 2022 to 8.3 per cent from 7.9 per cent earlier. Last month, the Commerce and Industry Ministry had revised upwards the core output for August 2022 to 4.2 percent.

Madan Sabnavis, Chief Economist, Bank of Baroda, said “With 7.4 per cent growth in core industries, which have a share of around 40 per cent in the IIP, the latter (IIP) may be expected to increase by 4-5 per cent this month (December)”.

He highlighted that crude oil production has been affected due to volatile prices as well as limited investment in new fields.

“Steel and cement have grown by 9 per cent which signals strong infra activity as well as private construction. The former is more in the government domain”, he said.

Aditi Nayar, Chief Economist, ICRA said “the core sector growth improved further in December 2022, which augurs well for the IIP performance in that month”. 

Fertilizer production has grown by 7.3 percent on top of 3.5 percent last year and is part of restocking being done by companies, Sabnavis said.