Key Infrastructure Sectors Witness Slower Growth in September
Infrastructure, real estate, building, budget. Growth rates in key sectors such as coal, fertiliser, and steel have moderated, while cement and refinery products show positive trends.
InfrastructureReal EstateIndustrial GrowthIipEconomyReal EstateOct 30, 2024
Out of the eight key sectors, three -- crude oil, natural gas, and electricity -- recorded negative growth in September. The growth rate of the production of coal, fertiliser, and steel has moderated to 2.6 per cent, 1.9 per cent, and 1.5 per cent, respectively, compared to 16 per cent, 4.2 per cent, and 14.8 per cent in September last year.
However, there are bright spots as well. Cement and refinery products output rose to 7.1 per cent and 5.8 per cent, respectively, in the month under review. This positive trend is a welcome sign for the construction and manufacturing industries.
The growth of core sectors, which include coal, crude oil, natural gas, refinery products, fertiliser, steel, cement, and electricity, was 4.2 per cent during April-September this fiscal year. This is a marked slowdown from the 8.2 per cent growth in the same period last fiscal. These eight core sectors contribute 40.27 per cent to the Index of Industrial Production (IIP), which measures overall industrial growth.
Commenting on the data, ICRA Ltd Chief Economist Aditi Nayar noted that the easing of disruption related to rainfall on sectors like mining and electricity contributed to the turnaround in the core sector's performance in September from the mild contraction in August. She highlighted that the growth in cement production improved to a six-month high.
Frequently Asked Questions
What are the eight key infrastructure sectors?
The eight key infrastructure sectors are coal, crude oil, natural gas, refinery products, fertiliser, steel, cement, and electricity.
What was the growth rate of these sectors in September 2023 compared to September 2022?
The growth rate of these sectors in September 2023 was 2 per cent, a significant slowdown from the 9.5 per cent growth in September 2022.
Which sectors recorded negative growth in September 2023?
Crude oil, natural gas, and electricity recorded negative growth in September 2023.
What is the contribution of these sectors to the Index of Industrial Production (IIP)?
The eight core sectors contribute 40.27 per cent to the Index of Industrial Production (IIP).
What is ICRA's projection for the IIP growth in September 2024?
ICRA projects the IIP to grow by about 3-5 per cent in September 2024, aided by a narrower contraction in electricity and mining output, a favourable base, and a sharp uptick in the growth in GST e-way bills.
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