Infrastructure Output Of Core Sectors Rises 4.4% In September 2021

September Infrastructure Output: The output of core sectors grew by 4.4 per cent
September Infrastructure Output: The output of core sectors grew by 4.4 per cent

Infrastructure Output in September 2021: The output of the eight core infrastructure sectors rose 4.4 per cent in September 2021, compared to the corresponding month last year, government data showed on Friday, October 29. The infrastructure output witnessed a muted growth of 0.6 per cent in September 2020 when the pandemic hit industrial activity across the country.

The growth of core sectors stood at 11.5 per cent in August and 9.4 per cent in July 2021. The eight core industries consists of 40.27 per cent of the total weight of the items included in the industrial output or the Index of Industrial Production (IIP).

The growth in the infrastructure output last month was mostly driven by the coal, cement, and natural gas sectors. The production of natural gas, cement, and coal sectors increased by 27.5 per cent, 10.8 per cent, and 8.1 per cent, respectively. The combined index of the eight core industries stood at 126.7 in September 2021, according to provisional data released by the Ministry of Commerce and Industry today. In the year-ago period, the combined index was 121.4.

The production of petroleum refinery products, fertilizers, steel, and electricity sectors also registered growth in September, increasing by six per cent, 0.02 per cent, three per cent, and 0.3 per cent, respectively, compared to the corresponding period last year.

The infrastructure output - which comprises the eight core sectors such as electricity, coal, crude oil, among others, recorded a growth of 16.6 per cent in April-September period of the current fiscal, compared to a de-growth of 14.5 per cent in the corresponding period last year.

Crude oil is the only sector that registered a de-growth in production last month at 1.7 cent, according to Commerce Ministry data. The sector has recorded a de-growth for the past two-three months.

"The growth in the core sector has started to normalize with 4.4 per cent YoY in Sep-21 as compared to 11.5 per cent YoY in Aug-21 with lower effect of a favourable base. In addition, a slowdown in the recovery of the core industrial sector is clear from the fact that all the eight core sectors without exception have shown a sequential decline.

While we continue to believe that government's thrust on infrastructure segment, progress in vaccinations along with strong export demand will continue to bolster overall industrial activity over the next few quarters, the Sep-21 core sector data has come as a negative surprises and highlights concerns on higher commodity prices and raw material shortages,'' said Mr. Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research.