Double-digit rise in cement production has solidified overall growth for five straight months.
“More, cement was the fastest growing of the eight core sectors in FY18. Increased budgetary support for affordable housing, the rural economy
are expected to support cement demand in FY19, too,” said Aditi Nayar, principal economist at ratings agency ICRA.
Coal, the next-best performing sector, saw output growth at a six-month high in March. Even so, growth of electricity
generation eased mildly in March to 4.5 per cent, relative to the February levels, Nayar added. According to data from the Central Electricity
Authority, hydropower generation contracted by 11.4 per cent. With a decline in reservoir levels, this is likely to continue falling over the next few months.
Steel, the other major pillar of the construction sector, saw production grow by 4.7 per cent, down from the five per cent rise in February.
Experts suggest favourable domestic demand and remunerative prices at home and abroad are likely to bolster production growth in the near term, although the risk of trade wars could affect export and import.
In energy, crude oil output contracted by 1.6 per cent in March, after another of 2.4 per cent in February. Natural gas
production. however, rose 1.3 per cent, reversing a contraction of 1.5 per cent in February. Experts said this might kickstart a growth spell in the sector, after hits every month since September 2017, when it had risen to 6.3 per cent. Crude oil has seen low or negative growth for the past one year.
As a result, growth in refinery products fell to one per cent, from February's 7.8 per cent.
“Sequential decline in core sector growth
in March is mainly explained by decline in refinery products production,” said Devendra Pant, chief economist at India Ratings and Research.
Based on this, growth in the primary goods category within the Index of Industrial Production is expected to be marginally weaker for March, even as consumption growth compensates, he added.