Core sector growth hits 3-month high of 6.7% in Feb
The output growth of eight core industries surged to a threemonth high of 6.7 per cent in February 2024, marking a turnaround from the slowing growth witnessed in January 2024 (4.1 per cent) and December 2023 (4.9 per cent).
Official data released on Thursday showed that the cumulative growth for AprilFebruary 2024 stood at 7.7 per cent, though it was below the 8.2 per cent registered in the corresponding period of the previous fiscal year.
For the month under review, the output of seven of the eight core industries was in positive territory. Only fertilizers saw a contraction of 9.5 per cent.
The eight core industries — coal, natural gas, crude oil, refinery products, fertilisers, cement, steel, and electricity — account for 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).
The government has revised the output growth upwards for the eight core industries for November 2023 to 7.9 per cent.
In February 2024, the output of the coal sector grew 11.6 per cent (9 per cent in February 2023); crude oil 7.9 per cent (4.9 percent); natural gas 11.3 per cent (3.1 percent); refinery products 2.3 per cent (3.3 percent); fertilizers 9.5 per cent (22.2 per cent); cement 10.2 per cent (7.4 per cent); steel 8.4 per cent (12.4 per cent); and electricity 6.3 per cent (8.2 per cent)
IIP EXPANSION
Aditi Nayar, Chief Economist, Head Research and Outreach, ICRA Ltd, said the core sector growth in February 2024 was boosted by a sequential improvement recorded by six of its eight constituents, other than fertilizers and steel, which may partly reflect the extra day in the leap month.
“Given the healthy improvement in core sector growth, we expect the IIP to record an expansion of 6.06.5 per cent in February 2024.”
Madan Sabnavis, Chief Economist, Bank of Baroda, said, “There has been allround performance across the eight sectors, barring fertilizers. Contraction in fertilizers can be explained by the high base effect as well as the fact that this is the period of harvest where there is less demand for the products,” he said.