Core sector grows 5.2% in March; coal, cement, electricity shine
Aided by a strong show from coal, cement and electricity sectors, the output of eight core industries grew 5.2 per cent in March 2024. This was higher than overall 4.2 per cent growth recorded in March 2023, but much lower than 7.1 per cent growth in February 2024.
Six of the eight core industries recorded positive growth for the month under review. Only refinery products and fertilizers saw contraction in output in March 2024 at 0.3 per cent and 1.3 per cent, respectively.
GROWTH DRIVERS
Coal, cement and electricity clocked growth rates of 8 per cent or above bolstering the overall growth rate for March 2024.
The eight core industries’ growth for entire 2023-24 came in at 7.5 per cent, lower than 7.8 per cent in previous year, o¬cial 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 government has also now revised upwards the eight core industries output growth for December 2023 to 5 per cent. Last month, the government had revised upwards the November 2023 core industries growth to 7.9 per cent.
The monthly readings for September 2023 and October 2023 were also revised upwards in earlier months.
In March 2024, coal sector output grew 8.7 per cent (11.7 per cent in March 2023); crude oil at 2 per cent (-2.8 per cent); natural gas at 6.3 per cent (2.7 per cent); refinery products at -0.3 per cent (1.5 per cent); fertilizers at -1.3 per cent (9.7 per cent); cement at 10.6 per cent (-0.2 per cent); steel at 5.5 per cent (12.1 per cent) and electricity at 8 per cent (-1.6 per cent)
Aditi Nayar, Chief Economist, Head Research and Outreach, ICRA Ltd, said the core sector growth eased to 5.2 per cent in March 2024, as the leap year eect faded, with five of the components reporting a flattening trend in the sequential months.
“Similar to the trend displayed by the core sector, IIP growth is likely to moderate somewhat in March 2024, as the leap year eect fades. We project the IIP growth at 3.5-5 per cent in March 2024,” Nayar added.
Madan Sabnavis, Chief Economist, Bank of Baroda, said that coal and cement were the star performers with growth of 8.7 per cent and 10.6 per cent, respectively.