Key Points
Core industries represent 40.27% of Industrial Production Index
Eight major sectors show positive growth in December
Power and cement sectors perform exceptionally well
Year-to-date growth moderated compared to previous year
The eight core industries include coal, natural gas, crude oil, refinery products, fertilisers, cement, steel and electricity which comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP). The growth rate of the core industries, therefore, is an indicator of the overall industrial growth rate.
Apart from natural gas, all the other sectors recorded positive growth in December 2024.
The sectors that showed positive growth in December 2024 are coal (5.3 per cent), refinery products (2.8 per cent), crude oil (0.6 per cent) fertilisers (1.7 per cent), cement (4 per cent), steel (5.1 per cent), and electricity (5.1 per cent).
For the April-December 2024 period, the growth rate of the core industries works out to 4.2 per cent, compared to 8.3 per cent in April-December 2023.
Experts attribute the decline to a high base effect and weaker performance across some sectors.
ICRA Chief Economist Aditi Nayar said the ore sector growth eased slightly to 4.0 per cent in December 2024 from the revised 4.4 per cent in November 2024, with four of the eight constituents witnessing a deterioration in their performance between these months. However, this was largely in line with the average growth of 4.0 per cent seen during October-November 2024.
"ICRA expects the IIP growth to moderate somewhat to 3-5 per cent in December 2024 (+4.4 per cent in December 2023) from 5.2 per cent in November 2024 (+2.5 per cent in November 2023), partly on account of an unfavourable base," Nayar added.
Bank of Baroda's Chief Economist Madan Sabnavis said the core sector growth moderation in December 2024 is accounted for by lower growth in 5 out of the 8 segments. The exceptions were power which did better at 5.1 per cent, cement 4 per cent and crude which turned positive from negative growth last year, he added.
"IIP growth for December would be around 4 to 4.5 per cent with support from the consumer goods segment," Sabnavis said.
