The output growth of India’s eight core sectors rebounded to 5.4% in November from a revised estimate of a 0.9% uptick in October, the slowest in 20 months. This was despite the fact that overall production levels in November 2022 remained the same as in the previous month.

The recovery in the year-on-year growth rate bodes well for the country’s industrial output numbers in November after a shocking 4% drop in October, as core sectors constitute about 40% of the Index of Industrial Production (IIP).

Cement output recovered sharply from a 4.3% contraction in October to jump 28.6% in November, while coal and electricity production levels accelerated to rise 12.3% and 12.1%, respectively.

Steel output grew at the fastest pace in six months at 10.8%, but production levels were 2.35% lower than in October 2022. Fertilizer production grew 6.4% from the November 2021 level.

However, the recovery in these sectors was offset by a continued dip in crude oil, natural gas and refinery output. Refinery products hit a 21-month nadir, contracting 9.3% in November, compared to a 3.1% fall in October.

Crude oil output contracted for the sixth successive month, shrinking 1.1% in November, while natural gas production dropped 0.7%, marking the fifth consecutive month of contraction.

“Compared to October 2022, the index of infrastructure industries remained flat in November 2022 but the momentum of month-on-month seasonally-adjusted growth turned positive,” said India Ratings economists Paras Jasrai and Devendra Kumar Pant, stressing that the recovery is not broad-based yet.