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New Delhi: Output of the core infrastructure sector that includes petroleum, steel, cement and electricity, posted a growth of 4.3% in November, the fastest pace of expansion in four months, led by a strong performance in the construction-related segment, official data showed on Tuesday.
Cement production surged by 13% year-on-year in November after posting sluggish output in the previous months due to low government spending on infrastructure development in the first half of the current financial year. Cumulative growth in cement production in the April-November period stood at 3.1% when compared with the corresponding period of last year.
Steel output increased by 4.8% while coal production jumped by 7.5%. Petroleum refinery production, which has over 28% weight in the combined index of eight core industries, posted a growth of 2.9% in November year-on-year, data released by the Ministry of Commerce and Industry showed.
Growth in the eight core sector in November is the fastest since July. However, the pace of expansion was lower when compared with November 2023 growth of 7.9%.
“The core sector growth rose to 4.3% in November 2024 from a revised 3.7% in October 2024, with an improvement in half of its 8 constituents, partly reflecting the fading impact of heavy rainfall in the earlier months,” said Aditi Nayar, Chief Economist at ICRA.
“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 said.
The eight core sectors contribute 40.27% to the Index of Industrial Production (IIP), which measures overall industrial growth. The November IIP data is scheduled to be released mid-January.
According to Nayar, IIP growth is likely to accelerate to 5-7% for November 2024, partly benefiting from the uptick in the core sector growth. The IIP growth stood at 3.5% in October.
A healthy expansion in the core sector bodes well for the economy, which witnessed a sluggish 5.4% expansion in July-September period, the lowest in seven quarters.