According to Index of Industrial Production (IIP) released by the government yesterday, cement production during February 2019 grew by 8% over February, 2018. However, month on month basis cement production has fallen by 4.48% during February 2019 as compared to previous month.
The combined Index of Eight Core Industries, including cement industry, grew by 2.1% in February 2019 as compared to the same period in the previous year. Its cumulative growth during April to February, 2018-19 was 4.3per cent.
During the first 11 months of just concluded fiscal year, that is, from April 2018 to February 2019, cement cumulative index increased by 13.0 over the corresponding period of previous year. In other words, cement production, according to the statistics released by the government has grown in healthy double digit. Since the residential real estate sector which is considered to be the major consumer of cement is in bad shape, demand from infrastructure and affordable housing have contributed to the robust growth in the cement production.
It should be noted that cement index during April 2017 – February 2018 had fallen by 1.4% over the corresponding period in the previous year, mainly due to disruption caused by RERA and GST introduction in the country. Thus, growth shown in the April 2018 – February 2019 is over comparatively lower base in the previous year.
The growth rate of 13% in cement index is the highest in last eight years. During 2016-17 cement index had grown negatively by -1.2% mainly due to disruption caused by demonetisation. Otherwise cement production has shown moderate growth of 5-6% since 2012-13.
Cement has seen highest growth rate, that is, 18.1% during October 2018. October is the beginning of the busy season for cement industry. However, that growth momentum could not be maintained in subsequent months and growth rate is hovering between high single digit and low double digit numbers thereafter.