The combined output of eight key infrastructure industries rose 5.1% in September, raising hopes of a positive knock-on impact on industrial production for the month and spreading some cheer in an economy mostly buffeted by a welter of dour data. The growth in the core sector index, comprising industries such as coal, crude oil, natural gas, refinery products, fertilizers steel, cement and electricity, in September was higher than the 2.3% in the preceding month and 2.5% in the same month a year earlier.
The growth was largely on the back of a strong showing by the coal and cement sectors, whose production increased 13% and 21.4%, respectively.
These eight infrastructure sectors have a combined weight of 38% in the index of industrial production (IIP), leading economists to expect the upcoming factory output data for September to be better than the previous month. Industrial output expanded 2.7% in August, after spending the preceding two months in negative territory.
Factoring in the latest data, the infrastructure index has grown 3.2% in the first six months of this fiscal year compared with 5% in the same period a year ago.
Cement production grew 13.4% from a year ago after falling 0.1% in August. Electricity Production Up 3.7%
The cement sector was possibly helped by a resumption in construction activity with the end of monsoon rains. The steel sector expanded just 2%.
Electricity production grew 3.7%, higher than 1.9% in August, while the rise in coal output growth was sharply higher than the 11% seen in August, flattered largely by a low base in the year-ago period when coal output had contracted 18.2%.
Crude oil production and natural gas continued to contract, falling 1.7% and 14.8%, respectively, although refinery output jumped 11.4% in September from a year ago. It was the 12th straight month of contraction in natural gas production.
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