India’s core sector growth in November dropped to a six-month low of 7.8%.

From April to November, there was an 8.6 percent increase in the output of India’s eight core industries compared to a growth of 8.1 percent in the first eight months of 2022–23.

In November 2022, India witnessed a growth of 5.7 percent in its eight core sectors, encompassing coal, crude oil, natural gas, refinery products, fertiliser, cement, electricity, and steel.

  • The growth of India’s eight core sectors in November was 7.8 percent, as per the data released by the Ministry of Commerce and Industry on December 29.
  • The growth in India’s eight key infrastructure industries last month was 7.8 percent, which is the lowest in six months and a significant decrease from the 12.1 percent recorded in October. The commerce ministry, on December 29, adjusted this figure to 12.0 percent.
  • In November 2022, there was a growth of 5.7 percent in the output of the eight core sectors.
  • From April to November, there was an 8.6 percent increase in the production of core industries compared to a growth of 8.1 percent in the first eight months of 2022–23.
  • The decline in core sector growth in November can be attributed to the cement sector, which experienced a significant contraction of 3.6 percent compared to the previous year. This decline comes after a substantial increase of 17.4 percent in October.

Here are the November performance figures for the other sectors:

  • Coal production increased by 10.9 percent, compared to 18.4 percent growth in October.
  • Crude oil output experienced a slight decline of 0.4 percent, contrasting with the growth of 1.3 percent observed in October.
  • Natural gas production increased by 7.6 percent, slightly lower than the 9.9 percent growth observed in October.
  • The output of refinery products increased by 12.4 percent, compared to the 4.2 percent growth in October.
  • Fertiliser output increased by 3.4 percent, compared to the 5.3 percent growth in October.
  • Steel production increased by 9.1 percent, slightly lower than the 10.7 percent growth seen in October.
  • The electricity output increased by 5.6 percent, which is lower compared to the 20.3 percent growth in October.

Despite a 7.8 percent increase in overall core sector output compared to the previous year, there was a 3.4 percent decrease from October. Interestingly, among the sectors, only coal and refinery products saw an increase in production in November compared to the previous month. However, cement and electricity production experienced a decline of 13–14 percent month-on-month.

The decrease in output can be attributed to the difference in the number of working days between November and October due to the festival season.

The decline in core sector growth in November suggests that industrial growth, as indicated by the Index of Industrial Production (IIP), is expected to decrease once the data for last month is released on January 12.

Considering the increased number of factory holidays, there is an expected moderate increase of 2-4 percent in the IIP for November,” stated Aditi Nayar, the chief economist at ICRA.

In October, India’s IIP growth reached a 16-month high of 11.7 percent, surpassing expectations and nearly doubling the September figure of 6.2 percent. This impressive performance was supported by a favourable base. Given the significant contribution of the eight core industries to the Index of Industrial Production (IIP), they are considered a reliable indicator of industrial growth.

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