Output growth from India’s eight core sectors slumped to a 14-month low of 3.8% in December 2023, compared to 8.3% a year earlier and a revised growth of 7.9% in the previous month.
Electricity generation, which has a 20% weightage in the Index of Core Industries (ICI), slipped to a eight-month low of 0.6%, while crude oil contracted for the second successive month by 1%, the sharpest slippage since June 2023.
Yet, the ICI released by the Commerce and Industry Ministry on Wednesday (January 31), was 5.9% above November 2023 levels, and reflected a nine-month peak in actual output levels. Coal production grew 10.6%, marking the slowest year-on-year uptick in six months, but output levels were at their highest since April 2023.
Refinery products and Steel output also hit their highest levels since April, despite annualised growth rates slowing sharply – with the former rising at a nine-month low pace of 2.6% in December, while steel grew at a 14-month low rate of 5.9%.
Cement output recovered from a 4% contraction in November, to rise 1.3% in December, but was a sharp 18.7% higher in sequential terms with production levels at their highest since July.
Fertilisers production grew at a seven-month high rate of 5.8% with output levels also the highest since May. Natural gas grew at a three-month low rate of 6.6%.
The core sectors constitute little over 40% of the Index of Industrial Production (IIP), which had clocked an eight-month low growth of 2.4% in November and those levels may persist in December as well.
Bank of Baroda chief economist Madan Sabnavis expects IIP to record a 2%-3% uptick in December, while ICRA chief economist Aditi Nayar pegged it in the range of 1% to 3%. The IIP numbers for December will be released on February 12.
