Key infra sector growth slows down to 4-month low of 8.1% in September

The growth of eight key infrastructure sectors slowed down to a 4-month low of 8.1 per cent in September 2023 against 8.3 per cent a year ago, according to the official data released on Tuesday.

The growth rate in the output of refinery products, fertiliser, cement and electricity during the month under review has decelerated, while it was negative in the case of crude oil.

The previous low was in May, when the growth rate of these sectors stood at 5.2 per cent.

Crude oil output dipped by 0.4 per cent in September as against a contraction of 2.3 per cent in the same month last year, the data showed.

The core sector growth in August was 12.5 per cent, which was highest since June 2022, when it was 13.2 per cent.

The output growth of the eight sectors was also lower at 7.8 per cent in April-September 2023-24 against 9.8 per cent in the year-ago period.

In September, coal, natural gas, and steel production rose by 16.1 per cent, 6.5 per cent and 9.6 per cent, respectively.

The growth rate in the production of refinery products, fertiliser, cement and electricity slowed down to 5.5 per cent, 4.2 per cent, 4.7 per cent and 9.3 per cent, respectively, in September this year against the last year's corresponding figures of 6.6 per cent, 11.8 per cent, 12.4 per cent and 11.6 per cent.

Icra Ltd Chief Economist Aditi Nayar said a pick-up in rainfall expectedly flattened the core sector expansion in September to a four-month low from 12.5 per cent, amid the slowdown in growth of seven of the eight constituent sectors barring fertiliser output.

"The year-on-year growth in cement production decelerated sharply to six-month low of 4.7 per cent in September...The IIP (index of industrial production) growth is likely to moderate to high single digits in September taking a cue from the core sector's trajectory," she said.

These eight industries account for 40.27 per cent of IIP.