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India's core infrastructure industries including steel, cement, and refinery products have shown a strong growth of 6.8 percent in November 2017 from 5 percent a month ago. This is a thirteen month-high after core sector industries registered a growth of 7.1 percent in October 2016. Robust double-digit growth in steel and cement pushed the overall growth of core sectors that includes eight industries -- coal, crude oil, natural gas, refinery products, fertilizers, electricity, steel and cement, government data showed.
Growth in cement sector surged to 17.3 percent from a decline of 1.3 percent a month ago. Steel sector grew at 16.6 percent in November from 8.4 percent in October, as per data released by the Ministry of Commerce and Industry on Monday.
"Things appear to be looking up. The good performance in these two sectors is primarily due to demand in the auto and capital goods segments and pick up in the construction sector following higher spending by the government," Madan Sabnavis, Chief Economist, CARE Ratings said.
"The early indicators for industrial production in the organized sectors in November 2017 provide favorable signals. We expect the growth of the Index of Industrial Production (IIP) to rebound to a healthy 5-6 percent in November 2017. The favorable base effect related to the temporary slowdown in activity after demonetization is likely to boost volume growth in a variety of sectors in the remainder of FY2018. Overall, manufacturing is likely to display healthy expansion in volumes in Q3 of FY2018, which should result in a substantial improvement in capacity utilization on a YoY basis," Aditi Nayar, Vice President and Principal Economist, ICRA said.
Coal output contracted to -0.2 percent in November, owing to a base effect in the past three months. The sector grew at 15.4 percent in August before slowing to 10.4 percent in September and 3.9 percent in October.
Growth in electricity sector eased to 1.9 percent in November from 3.2 percent in October. Fertilizer sector growth further slowed to 0.3 percent from 3 percent a month ago. Refinery products grew at 8.2 percent from 7.5 percent in October. Natural gas slowed marginally to 2.4 percent from 2.8 percent, while crude oil production grew at 0.2 percent from a contraction of 0.4 percent during the period under review.
"Government's focus on growth and rise in demand for consumer goods is expected to further boost the industrial production numbers," Sabnavis added.