The eight core industries’ output growth for July 2022 came in at 4.5 per cent, much lower than the upwardly revised 13.2 per cent output growth seen in June, data released by Commerce Ministry on Wednesday showed.

In the world’s fastest-growing major economy, six of the eight core sectors saw positive growth in output in July 2022. These six sectors were coal, refinery products, electricity, fertilisers, cement and steel. Only crude oil and natural gas sectors saw output contraction in July.

The growth rate of the eight sectors during April-July was 11.5 per cent, much lower than 21.4 per cent growth in the same period last year. 

Meanwhile, coal production rose 11.4 per cent year-on-year in July, and electricity generation increased 2.2 per cent. Both refinery products and fertilisers output grew 6.2 per cent in July 2022 from a year earlier.

Cement production rose 2.1 per cent, while steel output gained 5.7 per cent for the month under review. Crude oil output declined 3.8 per cent from a year earlier. Natural gas output fell 0.3 per cent in July 2022.

The core sector growth for June was revised upwards from 12.7 per cent earlier.The final growth rate of the index of eight core sectors for April 2022 was revised to 9.5 percent from its provisional level of 8.4 percent.

Previously, the Commerce and Industry Ministry revised the final growth rate of core industries for March 2022 to 4.8 per cent from 4.3 per cent earlier. The output for February  2022 was revised upwards to 5.9 per cent from the provisional level of 5.8 per cent.

Previously the growth output of core industries for January 2022 was revised upwards. The core output for December 2021 was earlier revised upwards to 4.1 per cent.

What experts say?

Aditi Nayar, Chief Economist, ICRA, said, “With the base effect normalising, core sector growth shrunk to 4.5% in July 2022, with only steel escaping a sequential slowdown”.

Madan Sabnavis, Chief Economist, Bank of Baroda, said there has been a tendency for core sector growth to slow down due to both the base effect and the monsoon as rainfall was heavy this month in the way of infrastructure activity. This got reflected in both cement and steel, he said. “We may expect IIP growth to be subdued correspondingly this month and be in the range of 4-5 per cent only”, Sabnavis added.