Affordable, rural housing a blessing? Cement industry boom in sight even as infrastructure growth stumbles

By: | Published: July 2, 2018 7:09 PM

The cement production in India is expected to expand by 6% in FY2019, exceeding the performance recorded in May 2018, even as the eight infrastructure industries registered a 10-month low of 3.6%. 

Affordable, rural housing a blessing? Cement industry boom in sight even as infrastructure growth stumblesThe cement production in India is expected to expand by 6% in FY2019 (Representational Image: AP)

The cement production in India is expected to expand by 6% in FY2019, exceeding the performance recorded in May 2018, even as the eight infrastructure industries registered a 10-month low of 3.6%. With a recovery in the affordable and rural housing markets and a pickup in infrastructure and construction, cement production in India is expected to expand by 6% in FY2019, Aditi Nayar, Principal Economist, ICRA told FE Online.

The growth of eight infrastructure industries dropped to a 10-month low of 3.6% in May due to a decline in production of crude oil and natural gas. The eight sectors, which also include coal, refinery products, fertilisers, steel and cement, had expanded by 3.9% in May 2017, according to the data released by the commerce and industry ministry on Monday.

Crude oil and natural gas registered a negative growth of 2.9% and 1.4% respectively in May compared to the year-ago period. “The moderation in the growth of the core sector industries and automobile production, suggest an impending decline in the pace of industrial expansion in May 2018 relative to the initial print of 4.9% for April 2018, led by mining and manufacturing,” Aditi Nayar said.

The growth rate of refinery products, steel and electricity declined to 4.9%, 0.5% and 3.5% in May from 5.4%, 3.8% and 8.2% respectively in May 2017. However, the output of coal and fertiliser grew by 12.1% and 8.4%, respectively, in May over the year-ago month.  During April-May this fiscal, the eight core industries recorded a growth of 4.1% cent as against 3.3% in the same period last year.

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