India's core sector growth slows to 7.8% in November
India's eight core industries experienced a growth of 7.8% in November 2023, marking the lowest increase in half a year, according to data from the Ministry of Commerce and Industry. This is a significant drop from the 12.1% growth seen in October, which has been adjusted to 12.0%. The eight key infrastructure industries include crude oil, coal, cement, steel, electricity, fertilizers, natural gas, and refinery products. In November 2022, these eight sectors had a growth rate of 5.7%.
Cement sector contraction contributes to slowdown
The primary reason for the decline in core sector growth was the cement industry, which contracted by 3.6% year-on-year after a substantial 17.4% increase in October. Other sectors' performance in November included a 10.9% rise in coal output, a 7.6% increase in natural gas output, a 12.4% growth in refinery products output, a 3.4% rise in fertilizer output, a 9.1% increase in steel output, and a 5.6% growth in electricity output. Meanwhile, crude oil output was 0.4% down.
Industrial growth may also decline
The decrease in core sector growth for November indicates that industrial growth, as measured by Index of Industrial Production (IIP), may also decline once data for last month is released on January 12. In October, India's IIP growth reached a 16-month high of 11.7%, surpassing expectations and nearly doubling September's figure of 6.2%, aided by a favorable base effect. The eight core industries account for over 40% of the IIP's weight, making their performance a key indicator of industrial growth.
