Core sector surges 3.2% in September; fastest in 4 months

03 Nov 2015 Evaluate

The core sector in the country once again locked themselves into a faster growth trajectory, rising to 3.2% in September as compared to 2.6% in August, fastest in four months, on the back of strong pick up in fertiliser production and electricity generation. The eight industries - crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel have a weight of 38% in the overall Index of Industrial Production (IIP) had grown at 2.6 percent in the same month of last year. The combined Index of Eight Core Industries stood at 166.8 in September, 2015, which was 3.2% higher compared to the index of September, 2014. Its cumulative growth during April to September, 2015-16 was 2.3%, lower than 5.1 percent the first six months of the last financial year.

Among eight core sectors, Fertilisers having 1.25% weight in IIP index continued to grow at the highest rate registered a growth of 18.1% in September, 2015 as compared to 12.59 per cent in August. It was negative at 11.6 in same month of last fiscal. Its cumulative index during April to September, 2015-16 increased by 8.0% over the corresponding period of previous year. Electricity generation, having 10.32% weight, increased by 10.8% in September, 2015 as against 3.9% same period last fiscal. Its cumulative index during April to September, 2015-16 increased by 4.1% over the corresponding period of previous year.

The coal sector having 4.38% weight expanded by a slower pace of 1.9 per cent in September this year as against 7.6 per cent in the same month last fiscal. However, it was higher than 0.4 per cent in August. Its cumulative index during April to September, 2015-16 increased by 4.2% over corresponding period of previous year. The Natural Gas production, having 1.71% weight, increased by 0.9% in September, 2015. Its cumulative index during April to September, 2015-16 declined by 2.1% over the corresponding period of previous year. Petroleum Refinery production having weight age of 5.94% increased by 0.5 % in September, 2015. Its cumulative index during April to September, 2015-16 increased by 3.6% over the corresponding period of previous year. It was better on yearly basis, but there was dip on month-on-month basis.

On the flip side, Crude Oil production, having 5.22 % weight, decreased by 0.1% in September, 2015 over September, 2014. Its cumulative index during April to September, 2015-16 increased by 0.4 % over the corresponding period of previous year. Steel production, having weightage of 6.68%, declined by 2.5 percent as compared to (-) 5.9 percent in the previous month. The sector had shown a growth of 6.6 percent in September 2014. Cumulative index during April to September, 2015-16 declined by 0.4% over the corresponding period of previous year. Cement Sector, having 2.41% weight, decreased by 1.5 % in September, 2015 as against a growth of 5.4 percent in August. The segment had posted a growth of 3.7 percent in September 2014-15. Its cumulative index during April to September, 2015-16 increased by 1.3 % over the corresponding period of previous year.

Growth in eight core industries rose to four-month high in September indicating a gradual recovery in the infrastructure sector that hold the key to revival of the economy. The performance by the core sector is likely to get reflected in the IIP numbers due October 12.

Core sector surges 3.2% in September; fastest in 4 months

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