Core sectors grew 8% in July, but output 2.2% below June levels

Core sectors’ output rises 8% in July, highest in 14 months. Coal, steel, natural gas production up; electricity, cement, fertilisers, refinery products slow. ICI at 3-month low, 2.2% below June’s levels. April growth revised to 4.6%. 6.4% growth in first 4 months of 2023-24.

All of India’s eight infrastructure industries reported growth for the first time in 14 months this July, with core sectors’ output rising 8% after a five-month high surge of 8.3% in June.

While July’s performance was buoyed by a 14.9% in coal production, steel output also rose in double digits for the ninth successive month, rising 13.5% in July. Natural gas production grew 8.9% in July, the fastest pace recorded since February 2022.

As per data released by the Commerce and Industry Ministry on August 31, crude oil production grew 2.1% in July, clocking an uptick for the first time since May 2022, the last time all eight infra sectors witnessed growth to take the overall Index of Eight Core Industries (ICI) 19.3% higher. In May, just six of the eight sectors had registered growth, while the seven of them grew in June.

Electricity output grew 6.9% in July, the fastest pace since February this year. However, cement output growth slowed to a four-month low of 7.1% in July, while fertilisers and refinery products’ output growth slowed sequentially to 3.3% and 3.6%, respectively.

Despite the healthy year-on-year growth rate, in absolute terms, the ICI was at a three-month low in July and 2.2% below June’s levels, with five of the eight sectors clocking lower output compared to June. The only infrastructure industries to see a rise in output from June 2023 levels were crude oil, natural gas and fertilisers.

The Ministry also revised the core sectors’ growth rate for April to 4.6% from its provisional level of 3.5%. Provisionally, the core sectors have now grown 6.4% in the first four months of 2023-24, compared to the same period in 2022-23.