The eight core industries’ output growth hit a two-month high of 3.1 per cent, sharply lower than the 12.7 per cent growth seen in same month last year.

The latest reading was, however, higher than the revised 2.4 per cent growth recorded in September 2024. In August 2024, the core sector industries had contracted 1.6 per cent. 

Six of the eight core industries’ output were in the positive territory in October 2024. 

For the period April-October 2024, the aggregate core industries output grew 4.1 per cent, substantially lower than 8.8 percent growth recorded in same period last fiscal, official data released by Commerce and Industry Ministry showed. 

The eight core industries — coal, natural gas, crude oil, refinery products, fertilizers, cement, steel and electricity — comprise 40.27 percent of the weight of items included in the Index of Industrial Production (IIP).

The sectors that showed positive growth in October 2024 are coal (7.8 per cent), refinery products (5.2 per cent), fertilisers (0.4percent), cement (3.3 per cent), steel (4.2 per cent) and electricity (0.6 per cent). The two industries that saw output contraction are crude oil (-4.8 per cent) and natural gas (-1.2 per cent).

In the first half this fiscal, core industries output grew 4.2 per cent, lower than 8.2 per cent growth witnessed in same period last year.

Commenting on the latest core industries data, Madan Sabnavis, Chief Economist, Bank of Baroda, said that core sector growth while modest does indicate that government spending has picked up as seen in steel and cement. 

Power production

“High base effect has affected power production. IIP growth will be around 4 percent this month. We can expect core growth to pick up in coming months”, Sabnavis added.

Meanwhile, the Centre has now revised upwards  the July 2024 core data growth to 6.3 per cent from 6.1 per cent earlier. 

In May this year, core industries had recorded 6.9 per cent growth. Last month the Government had pegged final growth rate for June 2024 at 5 per cent. 

Rahul Agrawal, Senior Economist, ICRA Ltd, said: “The year-on-year (YoY) growth in the core sector inched up to 3.1 per cent in October 2024 from 2.4 per cent in the previous month, despite an adverse base. The performance of the constituent industries was mixed, with four reporting an improvement in their growth between these months, and an equal number witnessing a slowdown”.

While the growth in electricity generation improved marginally in October 2024 vis-à-vis September 2024, it remained quite weak at sub-1 per cent, continuing to weigh upon the growth in core sector output in the month, he said. “The construction related indicators reported mixed trends, with the growth in steel production improving, while that in cement output deteriorating between these months, although both remained muted,” Agrawal said.

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