Core sector growth steady in May, tops 6% for 4th month

NEW DELHI: Growth in the country’s key

infrastructure sector

remained steady in May but three sectors – crude oil, fertilisers and cement – contracted due to sluggish demand and base effect.
Data released by the commerce and industry ministry on Friday showed the infrastructure sector, spanning coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity, rose an annual 6.3% in May, marginally slower than the previous month’s 6.7% expansion but higher than the 5.2% growth recorded in May 2023.

This was the fourth month in a row that growth has remained above 6%.
The sector accounts for nearly 41% of the index of industrial production (IIP). The

electricity sector

grew by 12.8% in May, faster than the 10.2% in April and above the 0.8% in May last year. The

steel sector

rose 7.6% in May, below the 8.8% in April and 12% in May 2023. The

crude oil sector

contracted 1.1%, fertilisers 1.7% and cement by 0.8%.
“While the

core sector growth

sustained above 6% for the fourth consecutive month, it eased slightly to 6.3% in May 2024 from 6.7% in the previous month, led by all constituents except electricity and coal,” said Aditi Nayar, chief economist at ratings agency Icra.
“A combination of factors, including the heatwave and the phased Parliamentary Elections, could have curtailed activity and execution in some sectors. We expect IIP growth to print at 4-5% in May 2024,” said Nayar.