India's industrial landscape showed a mixed but generally positive performance in May 2024, as consumer goods and core sectors displayed varying growth trends.
The consumer goods sector saw robust growth, with all use-based components recording improvements. Consumer durables production surged to a three-month high of 12.3% year-on-year, up from 10% in April. This increase is partly due to a low base effect from May 2023, when growth was just 1.5%. The uptick in consumer durables reflects a strengthening demand in the economy.
Primary goods also saw significant growth, expanding by 7.3% year-on-year, the fastest pace since December 2023. This growth was supported by a low base effect from May 2023, which recorded a 3.6% increase. However, the growth rate for construction goods slowed to 6.9% due to a high base effect (13% in May 2023) and reduced spending amid election-related uncertainties.
Capital goods growth slowed to 2.5% year-on-year, down from 8.1% in May 2023. Intermediate goods also experienced a slowdown, with growth decelerating to 2.5% from 3.2% in April. Consumer non-durables displayed volatility over the past five months but improved to 2.3% year-on-year in May, a recovery from the -2.5% recorded in April. This reflects gradual improvements in rural demand despite a challenging base from May 2023.
The performance of the eight core sectors also presented a mixed picture in May. Core sector growth moderated slightly to 6.3% year-on-year, compared to 6.7% in April. This deceleration was influenced by contractions in cement, crude oil, and fertilizers, which offset gains in coal and electricity.
Cement production saw its second consecutive monthly decline, contracting by 0.8% year-on-year—the steepest drop in six months. This reduction came after a high base from May 2023 and lower demand from the infrastructure sector due to elections. Conversely, electricity production grew impressively by 12.8% year-on-year, the highest in seven months, driven by increased household demand due to unusually hot weather.
Fertilizer output contracted by 1.7% year-on-year but saw a significant 15.4% month-on-month increase, reflecting higher production in anticipation of the kharif sowing season. Steel production growth decelerated by 1.1 percentage points to 7.7% year-on-year, likely due to reduced demand from the construction and auto sectors. Crude oil production fell to a one-year low of -1.1% year-on-year in May.
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