Core sectors' growth slows to 2.6 per cent in August

01 Oct 2015 Evaluate

Growth in eight core sectors - coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity, which comprise nearly 38% of the weight of items included in the Index of Industrial Production (IIP), slows to 2.6% in August compared with 5.9% in the corresponding month last year as steel production shrank and coal output flattened. The August output, however, was higher than the previous month when the core sectors had expanded by just 1.1 per cent. The combined Index of Eight Core Industries stands at 169.6 in August, 2015, which was 2.6% higher compared to the index of August, 2014. Its cumulative growth during April to August, 2015-16 expanded at a slower pace of 2.2 % as against 5.6 per cent in the first five months of 2014-15.

The decline in the core sector growth for the month of August was mainly on account of contraction in the steel. Crude Oil production having weight of 5.22% increased by 5.6% in August 2015 over August 2014. Its cumulative index during April to August, 2015-16 increased by 0.5 % over the corresponding period of previous year. The Natural Gas production having weight 1.71%, increased by 3.7 % in August, 2015. Its cumulative index during April to August, 2015-16 declined by 2.7 % over the corresponding period of previous year. Petroleum Refinery production having weight of 5.94% inched up by 5.8 % in August, 2015. Its cumulative index during April to August, 2015-16 increased by 4.3 % over 4.4% decline in the corresponding period of previous year. Fertilizer production having weight of 1.25% was the strongest performing sector increasing by 12.6 % in August, 2015. Its cumulative index during April to August, 2015-16 increased by 5.9 % over the corresponding period of previous year.

Further, Coal production having weight of 4.38% increased by 0.4 % in August, 2015 compared with year ago period. Its cumulative index during April to August, 2015-16 increased by 4.6 % over corresponding period of previous year. Cement production having weight of 2.41% increased by 5.4 % in August, 2015 against last fiscal period. Its cumulative index during April to August, 2015-16 increased by 1.8 % over the corresponding period of previous year. Electricity generation having weight of 10.32% increased by 5.6 % in August 2015 against same period last fiscal. Its cumulative index during April to August, 2015-16 increased by 2.8 % over the corresponding period of previous year.

Meanwhile the steel sector which showed a negative growth declined by 5.9 % in August, 2015 compared to same period last fiscal. Its cumulative index during April to August, 2015-16 declined by 0.03 % over the corresponding period of previous year.

The robust performance by the core sector is likely to get reflected in the IIP numbers due October 12.

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