The eight core industries’ output growth in November 2024 hit a four-month high of 4.3 per cent, lower than the 7.9 per cent growth seen in the same month last year.
However, the latest reading was higher than the revised 3.7 per cent growth recorded in October 2024. In September and August 2024, the core sector industries recorded growth of 2.4 per cent and contraction of 1.5 per cent, respectively.
Six of the eight core industries’ outputs were positive in November 2024.
For the period April-November 2024, the aggregate core industries output grew 4.2 per cent, substantially lower than 8.7 percent in same period last fiscal, official data released by Commerce and Industry Ministry showed.
The eight core industries —coal, natural gas, crude oil, refinery products, fertilizers, cement, steel and electricity —comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).
The sectors that showed positive growth in November 2024 are coal (7.5 per cent), refinery products (2.9 per cent), fertilizers (2 per cent), cement (13 per cent), steel (4.8 per cent) and electricity (3.8 per cent). The two industries that saw output contraction are crude oil (-2.1 per cent) and natural gas (-1.9 per cent).
In the first half of this fiscal year, core industry output grew 4.2 per cent, lower than the 8.2 per cent growth witnessed in the same period last year.
The Centre revised upwards the July 2024 core data growth to 6.3 per cent from 6.1 per cent earlier last month. In May this year, core industries recorded 6.9 per cent growth. The government had earlier pegged the final growth rate for June 2024 at 5 per cent.
Commenting on the latest core data, Aditi Nayar, Chief Economist and Head - Research & Outreach, ICRA said that the core sector growth rose to 4.3 per cent in November 2024 from a revised 3.7 per cent in October 2024, with an improvement in half of its eight constituents, partly reflecting the fading impact of heavy rainfall in the earlier months.
The sequential uptick in the core sector’s performance was especially driven by a sharp increase in the growth of cement output, on the back of a low base, she added.
“Looking ahead, we expect the IIP to grow by 5-7 percent in November 2024, parlty benefitting from the uptick in core sector growth”, Nayar added.
Madan Sabnavis, Chief Economist, Bank of Baroda said that there has been a pick up in infra activity as seen also in government spending more on capex this month. Construction of homes also showed momentum and was reflected in steady growth in steel and cement in November 2024. . “Fertilizer output is low reflecting higher inventories being used. Coal production increased by 7.5 percent which is reflective of better economic activity as well as steel. We may expect IIP growth to be around 4.5-5 percent given festival demand”, Sabnavis added.
Devendra Kumar Pant, Chief Economist and Head-Public Finance, India Ratings and Research said that November 2024 core sector growth at four months high at 4.3 percent depicts some sequential improvement in core sector in India.
“Barring coal and cement, growth of other sectors was less than 5 percent and is reflection of weak industrial activities. 8MFY25 growth at 4.2 percent, less than half of 8MFY24 (8.7%) suggests the industrial activities are still weak. Only coal, steel and electricity grew more than 5.0 percent in 8MFY25. The 8MFY25 trend suggests a weak industrial Gross Value Added (GVA) in FY25”, he said.