Core Industries Grow 7.9% In Historic High, Pg1

Key Highlights:

• India's core industrial growth reached a historic high of 7.9% in September.
• This growth rate is the highest recorded since at least April 2024, based on the new series data.
• The acceleration was primarily driven by strong performances in the coal, refinery products, and iron ore sectors.
• Compared to the old series, September's growth was the highest in nearly three years.

Core Industrial Growth.jpg

Detailed Insights:

• The coal sector expanded by 10.7% in September, benefiting from a low base effect as it had contracted in the same month last year.
• Growth in the refinery products sector unexpectedly accelerated to 10.3% in September, despite its average growth for the first half of the financial year being only 1%.
• The iron ore sector continued its strong performance with 18.4% growth, marking a two-month high and maintaining a trend of double-digit growth for nearly a year.
• The electricity sector also performed well, growing by 11.4% in September.
• Construction-related sectors showed positive growth, with steel quickening to 4.9% and cement growing at 9.8%.
• Conversely, the domestic crude oil sector contracted by 1.4%, and the natural gas sector by 4.6%.
• The fertilizer sector continued its contraction trend for the seventh consecutive month, declining by 11.7%.

Key Concepts Involved:

• Index of Core Industries (ICI): Measures the combined and individual performance of nine core industries: coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, electricity, and iron ore. The revised series has a base year of 2022-23 and replaces the earlier 2011-12 series, which covered eight industries. Iron ore is the newly added industry.
• Base Effect: A distortion in a current growth figure caused by exceptionally high or low levels in the previous reference period, making comparisons challenging.