The eight core industries’ output growth subsided to a six-month low of 7.8 per cent. Despite this moderation, it has significantly outperformed the 5.7 per cent growth seen during the same month in the previous fiscal year. 

This resilience in growth demonstrates a noteworthy improvement and stability within these fundamental sectors, suggesting a robust trajectory despite the recent deceleration, say experts. 

The latest print was however lower than the 12 per cent growth recorded in October 2023.

For the period April-November 2023, the core industries output came in at 8.6 per cent, substantially higher than 8.1 per cent in same period last fiscal, official data showed. 

The Government has also now revised upwards the eight core industries output growth for August 2023, pegging the final growth at 13.4 per cent as compared to 12.5 per cent estimated earlier.

The eight core industries —Coal, Natural Gas, Crude Oil, refinery products, fertilisers, Cement, Steel and Electricity —comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).

In November 2023, except for Crude oil and Cement, all the remaining six industries record positive growth.

In fiscal 2022-23, core industries output grew 7.6 per cent, lower than 10.4 per cent growth in the previous fiscal.

Coal output continued to sizzle with growth of 10.9 per cent in November 2023, but lower  than the 12.3 per cent growth in November last  year.

For the month under review, Cement sector contracted 3.6 per cent (29.1 per cent) and electricity generation was up robust 5.6 per cent (12.7 per cent).

OTHER INDUSTRIES 

For the month of November 2023, natural gas output grew 7.6 per cent (-0.7per cent); refinery products at 12.4 percent (-9.3 per cent); fertilisers at 3.4 per cent (6.4 per cent); Steel at 9.1 per cent (11.5 per cent).

Crude oil output saw contraction of o.4 per cent (-1.1 per cent).

EXPERTS’ TAKE 

Madan Sabnavis, Chief Economist, Bank of Baroda, said that Core sector growth at 7.8 per cent shows steady growth again. The slight moderation has been due to base effects, he said. The high base effect has come in the way of cement production which has turned negative, he added.

“We can expect IIP growth of upwards of 7-8 per cent this month due to late festival season”, Sabnavis said.

Sabnavis said that November has been otherwise good month for business. Fertilisers growth slowed down on expected lines as rabi sowing comes to an end. Natural gas and refinery products did well over negative growth last year. 

Aditi Nayar, Chief Economist, Head Research and Outreach, ICRA Ltd, said “As expected, the delayed onset of the festive season led to a moderation in core sector growth to a six month low 7.8 per cent in November 2023 from 12 per cent in October 2023, with only petroleum refinery products displaying a pickup in YoY growth between these two month”

Disaggregated data remained mixed, with crude oil and cement displaying a YoY contraction in November 2023, even as petroleum refinery products and coal recorded a double-digit expansion, she added.

“On average, the core sector expanded by nearly 10 per cent in October-November 2023, an encouraging sign. 

Given the larger number of factory holidays, we anticipate a modest 2-4 rise in the IIP in November 2023”, Nayar added.

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