NEW DELHI: India’s eight core industries grew 1.8% in November, snapping a contraction in October, as higher output in fertilizers, steel, coal and cement offset continued weakness in oil, gas and refinery products, official data showed.
Cement output rose 14.5% during the month, fertilizers grew 5.6%, steel expanded 6.1%, and coal production increased 2.1%.
Overall core sector growth, however, remained modest as output of crude oil, natural gas and refinery products contracted, according to data released by the ministry of commerce and industry on Monday.
During the April-November period of the current fiscal year, core sector output expanded 2.4% year-on-year.
The eight core industries—coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity—together account for more than two-fifths of India’s total industrial output.
In October, output contracted in four sectors—coal, crude oil, natural gas and electricity—while steel production slowed compared with the previous month. Cement, fertilizers and refinery products, however, recorded month-on-month increases, leaving overall core sector output flat year-on-year.
November’s 1.8% growth compares with a 5.8% expansion in the same month last year, pointing to a strong base effect.
Madan Sabnavis, chief economist at Bank of Baroda, noted that steel output grew 6.1% against 10.5% a year ago, while cement’s 14.5% growth came on top of a 13.1% expansion last year. “The push to infrastructure creation in both roads and housing has contributed to this growth in these two industries,” he said.
Fertilizer output grew 5.6% compared with 2% a year earlier, which Sabnavis attributed to a base effect as well as inventory stocking after the rabi sowing season.
On the contraction in oil and gas output, Sabnavis said low global oil prices have dampened domestic production given the associated costs. Electricity generation declined 2.2%, which he said could reflect weaker demand amid the earlier-than-usual onset of winter.
Sabnavis added that industrial production may have expanded in the range of 2.5–3% in November.
In October, India’s industrial production had grown 0.4% year-on-year, its slowest pace in 14 months, as manufacturing activity decelerated and output in mining and electricity contracted.