Whalesbook
India's vital infrastructure sectors posted a stronger performance in April, with output growth accelerating to 1.7%. This marks a significant improvement from the 1.2% expansion recorded in March and surpasses the 1% growth seen in April of the previous year. The uptick was primarily fueled by robust production in the steel, cement, and power industries.
Key Sectoral Performance
Steel production surged by 6.2%, while cement output saw a considerable increase of 9.4%. Electricity generation also contributed positively, rising by 4.1%. These three sectors were the primary drivers behind the overall positive growth.
Sectoral Contractions
However, the positive momentum was tempered by contractions in several key areas. Coal, crude oil, natural gas, refinery products, and fertilizer output all registered negative growth during April. This uneven performance suggests that while some sectors are recovering, others are still facing pressure.
Economic Outlook
Megha Arora, Director - Economics at India Ratings & Research, noted that the improved core sector performance is expected to boost the upcoming Index of Industrial Production (IIP) growth to around 5%. Core sectors constitute a substantial 40.27% of the IIP.
Arora further projected that this recovery is likely to continue, with a growth forecast of approximately 3% for May, aided by a lower base effect and potential improvements in fertilizer production. Rahul Agrawal, Senior Economist at ICRA Ltd., pointed out that the concurrent output contractions in five of the eight sectors, excluding steel, cement, and electricity, could indicate the impact of the West Asia crisis on economic activity in certain segments.