India's core sector output jumps 1.7% in April
What's the story
India's infrastructure output witnessed a modest growth of 1.7% in April, up from a revised 1.2% in the previous month. The eight core industries' growth was mainly driven by coal, steel, and cement sectors. However, crude oil, natural gas, and fertilizers continued to be a drag on overall growth. The core sector contributes nearly 40% to the Index of Industrial Production (IIP) and is considered an early indicator of industrial activity trends.
Performance
Coal, steel, and cement drive growth
The coal sector witnessed a major turnaround with production growth rising to 3.5% in April from a contraction of 4% in March. Meanwhile, the steel sector also showed resilience with an output expansion of 6.2%, albeit at a slower pace than the previous month's 7.7%. The cement sector also saw strong growth, with production increasing to 9.4% from just 4.7% in March this year.
Energy sector
Electricity generation improves significantly
Electricity generation improved significantly with a growth rate of 4.1% in April, up from just 0.8% in March. This increase reflects the rising power demand amid rising temperatures across India. However, the recovery remained uneven as crude oil production contracted by 3.9%, while natural gas output declined by an even sharper margin of 4.3%.
Market trends
Fertilizers remain a drag
The fertilizer sector continued its downward trend with a contraction of 8.6% in April, following a sharp decline of 24.6% in March. This slump can be attributed to the ongoing West Asia crisis as the Middle Eastern region is a major contributor to India's fertilizer industry. Similarly, petroleum refinery products also remained in negative territory with a shrinkage of 0.5%.