March 2019: IIP @ 4.7%

The infrastructure sector continued its growth momentum for the second month in a row, hitting a five month high of 4.7% in March on the back of strong output in coal and cement.

The index of eight core sector industries recorded 2.2% growth in February and 4.5% in March 2018.

The eight infrastructure industries — coal, cement, steel, electricity generation, crude oil, fertilizers, refinery products and natural gas — have a combined 40.27% weight on the Index of Industrial Production, suggesting that the industrial growth is likely to revive from its 20-month low recorded in February.

Higher growth in infrastructure was driven by a 15.7% rise in cement output, suggesting some pick-up in construction ahead of monsoons as this growth is on a high base of 13.5% rise in the same month last fiscal.

A reasonable 6.7% rise in steel production in March also backs construction recovery.

Coal production rose 9.1%, but there was no commensurate rise in power generation, which was up only 1.4% in March, marking third successive month of tepid growth.

Crude oil production stayed downhill, falling 6.2% in March from the year-ago period. Natural gas production was up 1.4% in March, while refinery products and fertilisers rose 4.3% each.

For the entire 2018-19 fiscal, the core sector expansion rate remained flat at 4.3%.

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