Weak performance in electricity, crude oil, gas, and fertilisers drags infrastructure output
New Delhi: India’s key infrastructure sectors posted their slowest growth in nine months in May, signalling emerging weakness in the broader industrial economy. The eight core sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity — grew by just 0.7%, down from 1% in April and far below 6.9% recorded in May 2023, according to data released by the Ministry of Commerce and Industry on Friday, reported timesofindia.indiatimes.com.
This tepid growth was primarily due to a sharp contraction in electricity, crude oil, natural gas, and fertiliser output. The electricity sector shrank by 5.8%, a steep decline compared to a 1.7% expansion in April. Fertilisers dropped 5.9%, worsening from April’s 4.2% contraction. Natural gas declined 3.6%, and crude oil output fell 1.8%, marking the fifth straight month of decline for the sector.
Core sector output in May 2025 grew just 0.7%, its lowest in nine months, dragged down by falling electricity, fertiliser, gas, and oil output.
The fertiliser and crude oil sectors continue to underperform, reflecting both structural challenges and seasonal demand patterns. Fertilisers have now contracted for two consecutive months, while crude oil output has been slipping since January.
On a more positive note, steel and cement — key indicators of construction activity and investment demand — posted strong numbers. Steel production rose 6.7%, and cement output jumped 9.2%, compared to 6.3% growth in April.
The core sector constitutes about 41% of the Index of Industrial Production (IIP), and its performance is often seen as a lead indicator of industrial growth. The weak showing in May may weigh on the IIP figures expected later this month.
Economists suggest that while the industrial economy remains uneven, the strong performance in steel and cement signals continuing demand in construction and infrastructure sectors. However, persistent weakness in energy-related sectors could limit overall momentum unless addressed through policy or investment incentives.
