Infrastructure sectors’ output growth moderates to 5.3% in March

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India’s eight core infrastructure sectors’ output growth moderated to 5.2% in March from an upgraded 7.1% uptick in February, with excessive growth in Cement and Electricity manufacturing offset by contractions in fertilisers and refinery merchandise.

For the total yr 2023-24, the core sectors recorded a three-year low growth of seven.5%, in contrast with 7.8% in 2022-23. However, this additionally marked the primary time in at the least 12 years that each one eight sectors had recorded annual growth, led by double-digit upticks in metal and coal, at the same time as crude oil output rose 0.6% after 11 years of contraction. 

Notably, with a studying of 173.3 in March, the Index of Core Industries (ICI) was 9.9% over February ranges, and marked the very best print in at the least seven and a half years. The ICI constitutes a bit of over 40% of the Index of Industrial Production (IIP).

While all sectors recorded increased manufacturing ranges in contrast to February, simply six of the eight sectors recorded year-on-year growth as properly. Fertilisers contracted 1.3% from final March, marking the third successive month of a drop in output, whereas refinery merchandise shrank 0.3%.

Steel output grew 5.5%, the slowest tempo since July 2022, whereas pure gasoline and crude oil manufacturing rose 6.3% and a couple of%, respectively. Cement manufacturing and electrical energy technology rose at a five-month excessive tempo of 10.6% and eight%, respectively. Coal output rose 8.7%, marking the slowest growth since final June. However, coal manufacturing ranges have been 20.7% increased than February.

Economists anticipate total industrial output growth to additionally cool off from the 5.7% uptick recorded in February. The Index of Industrial Production for March will likely be launched on May 10. 

“Similar to the trend displayed by the core sector, IIP growth is likely to moderate somewhat in March 2024, as the leap year effect fades. We project the IIP growth at 3.5-5% in March 2024,” stated Aditi Nayar, chief economist at score company ICRA.

In 2023-24, metal output grew 12.3%, adopted by an 11.7% uptick in coal and a 9.1% rise in cement manufacturing. Electricity technology recorded a 7% rise, the slowest in three years, whereas pure gasoline output grew 6.1%. Fertilisers and refinery merchandise grew 3.7% and three.4%, respectively.