The eight core industries output for November 2021 grew a lower-than-expected 3.1 per cent, reflecting some slackening of momentum post the festival season. In October, the eight core industries output grew a robust 8.1 per cent.

The latest reading was however better than the contraction of 1.1 per cent recorded in November 2020.

Growth in 6 sectors

Slowdown in output growth was seen in November 2021 in as many as six of the eight core sectors. These six sectors were coal (8.2 per cent), natural gas (23.7 per cent), refinery products (4.3 per cent), fertilisers (2.5 per cent), steel (0.8 per cent) and electricity (1.5 per cent).

The other two sectors — crude oil and cement saw a year-on-year contraction of 2.2 per cent and 3.2 per cent, respectively.

Also read: Industrial output grew 3.2% in Oct

Moreover, the YoY growth of only fertiliser output recorded a rise in November 2021 relative to the previous month (0.4 per cent), as rabi sowing progressed.

Meanwhile, the government has revised upwards the core industries’ output growth for August 2021 to 12.2 per cent from 11.6 per cent announced previously.

For April-November 2021, core industries output grew 13.7 per cent as compared to contraction of 11.1 per cent in the same period last year, an official release said.

Commenting on the latest core sector numbers, Madan Sabnavis, Chief Economist, CARE Ratings, a ratings agency, said the core sector data come as a disappointment as it shows a slowdown to 3.1 per cent despite a low-base effect. Clearly, there has been a lull in the infrastructure space with both steel and cement being downbeat. This does not augur well for the IIP growth for the month and investment, he said.

The Central government needs to expedite its capex which is running lower at 49 per cent compared to 58 per cent of budget last year, he added.

Aditi Nayar, Chief Economist, ICRA, a rating agency, highlighted that cement, crude oil and refinery products reported a sobering contraction in November 2021 relative to November 2019.

“With the considerable moderation in the core sector growth and the sequential decline in the GST e- way bills, we expect the IIP growth to flatten to under 2.5 per cent in November 2021, in spite of the low base (-1.6 per cent in November 2020),” she said.

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