Latest news with #IndexofCoreIndustries
&w=3840&q=100)
Business Standard
2 days ago
- Business
- Business Standard
Core sectors' growth plunges to a 9-month low of 0.7% in May 2025
Output growth in India's eight core infrastructure industries plummeted to a nine-month low of 0.7 per cent in May from an upwardly revised figure of 1 per cent in April, with half the sectors clocking sharp contractions. Electricity generation contracted for the first time in nine months, with a 5.8 per cent drop that marked the sharpest downturn since June 2020. Crude oil output dipped 1.8 per cent, shrinking for the fifth straight month. Fertilisers production contracted for the second month in a row, with May's 5.9 per cent drop being the sharpest since February 2024, while natural gas output (-3.6 per cent) shrank for the 11th successive month. On the positive side, growth in cement production accelerated to 9.2 per cent in May, recovering from April's six-month low uptick of 6.3 per cent. Steel output also picked up pace and grew 6.7 per cent during the month, compared to a revised 4.4 per cent uptick recorded in April, which was the weakest in seven months. 'Clearly, the pick-up in infrastructure activity has aided steel production. Demand from construction and auto besides capital goods would account for this increase. Cement too did very well, which is reflective of the government activity in the capex space,' said Bank of Baroda chief economist Madan Sabnavis. Coal production growth decelerated a tad to 2.8 per cent from 3.5 per cent in April, while refinery products output grew 1.1 per cent in May after a 4.5 per cent contraction in the previous month. The eight core sectors constitute 40.27 per cent of the Index of Industrial Production (IIP), which had fallen to an eight-month low of 2.7 per cent in April from an upward revised figure of 3.94 per cent in March. Economists now expect industrial output growth to drop to 1.5 - 2 per cent in May. Base effects also affected last month's growth print, as the Index of Core Industries (ICI) had risen 6.9 per cent in May 2024, which was the highest in the past 13 months. 'Excess rains in the latter part of May 2025, owing to the early onset of the monsoon, likely weighed on the performance of the electricity and some of the mining sectors in the month. However, the YoY performance of the steel, cement, refinery products and crude oil sectors improved in May 2025 vis-à-vis April 2025, partly offsetting the deterioration in the performance of the other sectors,' said Rahul Agrawal, senior economist, ICRA Ratings.
&w=3840&q=100)
Business Standard
20-05-2025
- Business
- Business Standard
India's core sector growth plunges to eight-month low of 0.5% in April
Output growth in India's eight core infrastructure industries plummeted to an eight-month low of 0.5 per cent in April from an upwardly revised 4.6 per cent growth recorded in March, with three sectors contracting sharply, including refinery products and fertilisers, while electricity and natural gas clocked very feeble upticks. Base effects also pulled down last month's growth print, as the Index of Core Industries (ICI) had risen a sharp 6.9 per cent in April 2024, which was the joint highest in the past thirteen months. Cement production grew at the fastest pace among the core sectors, rising 6.7 per cent in April, but this was almost half the pace recorded in March and the lowest uptick in six months. Steel output grew 3 per cent and electricity generation rose a mere 1 per cent, the slowest uptick in seven months for both sectors. Coal production rose at a three-month high pace of 3.5 per cent, while natural gas output grew for the first time in ten months, albeit by a fractional 0.4 per cent, according to data released by the Ministry of Commerce and Industry on Tuesday. Crude oil output (-2.8 per cent) contracted for the fourth consecutive month, that economists attributed to low global prices, while output in refinery products contracted for the first time in eight months, with a 4.5 per cent drop that marked the sharpest downturn since November 2022. The eight core sectors constitute 40.27 per cent of the Index of Industrial Production (IIP), which had recorded a mild recovery to rise 3 per cent in March. Economists now expect industrial output growth to drop to around 1 per cent in April. 'The impact of Tariff Tantrums-led unprecedented economic uncertainty along with a high base effect pulled the infrastructure output growth down to be the lowest since August 2024, with six of eight sectors seeing a moderation in growth,' said Paras Jasrai, Associate Director at India Ratings and Research. Jasrai said he expects IIP growth in the range of one to two per cent in April, and core sectors' growth to improve to around 2 per cent in May. Terming the ICI print for April 'quite disappointing', Bank of Baroda chief economist Madan Sabnavis reckoned that IIP growth will be in the range of 1 per cent to 1.5 per cent for last month. Rating agency ICRA said IIP growth could moderate sharply to just around 1 per cent in April, citing the tepid core output numbers and other available high frequency indicators. 'The healthy growth in non-oil exports may provide an upside, unless the same represents round-tripping of some imports,' the firm's chief economist Aditi Nayar noted.
