Core sector growth slows to 5-month low of 3.6% in Mar

GROWTH IN CORE infrastructure industries moderated to a five-month low in March at 3.6% year-on-year, partly due to the base effect but also because of unseasonal rains

- SURABHI

Only two sectors coal and crude petroleum registered sequential improvement.

The data comes at a time when there is expectation of a slowdown in economic activities, but is at odds with other high frequency indicators such as the PMI and revenue from the Goods and Services Tax registering robust expansion in the month.

This is the slowest growth in core sector industries since October 2022 when it registered a mere 0.7% expansion. March's core sector growth was also the second-lowest in FY23.The eight core industries grew by 4.8% in March, 2022 and by 7.2% in February, 2023.

Onacumulative basis, the core sector industries grew by 7.6% in FY23 as against 10.4% growth in FY22. Significantly, December’s provisional core sector data has been revised upwards to 8.3% from 7% with sharp revision in steel production.

Given that these core sectors have a combined weight of 40.3% in the index of industrial production IIP), analysts expect IIP growth to also taper in the month to about 3-4% from 5.6% in February this year.