Core infra sectors’ output slows to 0.5% in May

NEW DELHI: Production growth of eight core infrastructure sectors slowed to a seven-month low of 0.5 per cent in May due to a fall in output of coal, crude oil and refinery products.

The core sectors’ growth was 1.8 percent in April 2026 and 1.2 per cent in May 2025. According to the government data released on Monday, coal, crude oil, natural gas, refinery products and fertiliser output re- corded negative growth.

The growth rate in the production of steel and cement declined to 5 per cent and 8.4 per cent in May against 7.4 per cent and 9.7 per cent, respectively, in May 2025.

The only bright spot was electricity generation, which grew 8.7 percent during the month under review, compared with a contraction of 4.7 per cent in May last year.

During April-May 2026-27, the key sectors’ expansion remained flat at 1.1 per cent. The previous low growth rate was in October 2025, when these eight sectors’ output recorded a negative growth of 0.1 per cent.

Commenting on the data, Rahul Agrawal, Principal Economist, ICRA Ltd, said as many as five sectors reported a contraction in their output in May 2026, including refinery products, which witnessed the sharpest decline in 42 months, partly reflecting the fallout of the West Asia crisis.

The growth in electricity generation improved to a 19-month high of 8.7 per cent in the month, aided by high temperatures as well as a favourable base, he said, adding that this ensured that overall core output growth remained in the positive territory in the month.

“Given the tepid performance of the core sector in May 2026, IIP (index of industrial production) growth is likely to weaken to 2-3 percent in the month from 4.9 per cent in April 2026,” Agrawal added.