Infra output growth hits 7- month high, shows data

■ Disaggregated data continued to provide mixed signals, says expert

India’s annual infrastructure output grew to a 7- month high of 6.7 per cent in June due to better performance by cement, refinery and coal segments. Infrastructure output, which comprises eight sectors such as coal, crude oil and electricity, accounts for nearly 40 percent of India’s industrial output ( IIP).

The previous high rate of growth was recorded in November 2017 at 6.9 per cent. The growth rate in May was 4.3 per cent.

As per the data released by the commerce and industry ministry, the expansion in cement, refinery products and coal was 13.2 per cent, 12 per cent and 11.5 per cent respectively, year- on- year basis.

Crude oil and natural gas registered a negative growth of 3.4 per cent and 2.7 per cent respectively in June compared to the year- ago period.

The expansion in the electricity generation was 4 per cent in June compared to 2.2 per cent in the same month of the last fiscal.

Steel sector, however, witnessed a growth of 4.4 per cent compared to 6 per cent in June 2017. The data revealed that expansion rate in the fertiliser segment was 1 per cent, better than negative growth recorded in the year ago month.

During the April- June quarter of the current fiscal, the eight core industries recorded a growth of 5.2 per cent as against 2.5 per cent in the same period last year.

“A healthy pickup in the pace of growth of refinery products and steel, as well as a favourable base effect, contributed to the sequential improvement in core sector expansion to a seven month high 6.7 per cent in June 2018,” said Aditi Nayar, principal economist at Icra.

She said that disaggregated data continued to provide mixed signals. “While coal, cement and refinery products recorded double- digit growth, the sharp slowdown in growth of fertilisers and the deepening contraction in crude oil and natural gas in June 2018 relative to the previous month, were disappointing,” she said.

The pickup in the growth of core sector industries, automobile production and non- oil merchandise exports is likely to boost the pace of expansion to around 6 per cent in June 2018, said ICRA.