Tuesday, January 31, 2023

Eight core sectors’ output grows at 7-month low of 4.4%


India’s infrastructure industries grew at a seven-month low as growth in most industries eased, official data released on Friday showed with economists expecting semiconductor shortages to impact industrial growth.

Core sector rose 4.4% in September as against 11.5% in August and 0.6% in the year ago period. It contracted 5% month-on-month against a decline of 1% in August.

Growth slowed in five of the eight infrastructure sectors.

“With the base effect wearing off and copious rainfall dampening mining and construction activities, as well as demand for electricity, the slide in core sector growth was in line with expectations,” said Aditi Nayar, achief economist at ICRA.


The Index of Core Industries measures the output of eight infrastructure sectors: coal, steel, cement, fertiliser, electricity, natural gas, refinery products and crude oil. Six of these sectors – coal (8.1%), refinery products (6%), steel (3%), cement (10.8%) and electricity (0.3%) – posted lower growth in September, while output in natural gas (27.5%) and fertiliser (0.02%%) rose. Crude oil output shrank at a lower pace of 1.7% from a year earlier.

As per Madan Sabnavis, chief economist at CARE Ratings, the surprise factor here is coal which registered high growth of 8.1% on top of 21% last year which means that the shortage that was witnessed in October was more due to inventory management rather than production.

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