India's infrastructure growth hits 0%, worst in 14 months
What's the story
India's core sector growth has stagnated at 0% year-on-year in October, the lowest in 14 months. The stagnation comes after a revised growth of 3.3% in September and indicates a broad slowdown across major industrial sectors. The eight core industries—coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity—contribute immensely to the Index of Industrial Production (IIP). This index is a key indicator as it accounts for over 40% of India's industrial output.
Sector slowdown
Coal and electricity generation lead to stagnation
The most significant pullback was seen in coal, which contracted by 8.5%. This was a sharp contrast from the growth seen in August. Electricity generation also fell by 7.6%, driven by lower thermal output. Natural gas production fell by 5%, extending its contraction streak, while crude oil production slipped by 1.2% for another month of decline in India's hydrocarbons sector.
Sector performance
Refinery products and fertilizers show positive growth
Despite the overall stagnation, some sectors managed to post positive growth. Refinery products rose by 4.6% after a two-month contraction. Fertilizers also saw a strong rise of 7.4%, aided by pre-rabi stocking. These gains were largely driven by strategic stocking measures ahead of seasonal changes in agricultural practices across India.
Sector resilience
Steel and cement sectors continue to grow
The steel sector emerged as the strongest performer with a growth rate of 6.7%. This was largely due to strong construction activity, infrastructure rollouts, and demand from the auto sector. The cement sector also witnessed growth of 5.3%, continuing its positive trend after the monsoon phase-out. These sectors have shown resilience amid broader industrial slowdowns in India during this period.