Amid the disappointing performance of the index of core industries (ICI) in July 2017, at 2.4% year on year growth, the steel industry stands out with an outlier growth of 9.2%. In fact, steel has shown a robust growth of 10.9% on average in the past 12 months, which is far higher than average ICI growth of 3.6%.
Steel’s standout performance is even more notable in the context of a larger industrial slowdown. The index of industrial production (IIP) has averaged an even worse growth than ICI at 1.4% in the April-July 2017 period. Value added by the industrial economy is also equally bad, thanks to the cumulative effect of short-term factors like demonetisation and GST implementation as well as lack of conducive enough conditions to lift up industrial growth in the medium to long-term.