Core sector growth dips to 1.8% in November

Growth rate of eight core sector industries declined to 1.8 per cent in November 2012, from 7.8 per cent in the same month last year, mainly due to contraction in production of natural gas, coal and cement. During April-November 2012-13, the cumulative growth rate of the core industries was 3.5% as against 4.8% recorded during the corresponding period in 2011-12.
 
Petroleum refinery production with a weight of 5.94% in IIP index grew by 6.6% in November 2012 compared to its growth at 11.2% in November 2011. On collective basis, it registered a growth of 7.2% during April-November 2012-13 compared to 4.4% growth during the same period of 2011-12.

Crude oil, which occupies 5.22% weight age in index registered marginal growth of growth 0.8% in reporting month compared to a negative growth of 5.7% in November 2011. Cumulatively, Crude Oil production recorded a negative growth of 0.5% during April-November 2012-13 compared to its growth at 2.9% during the same period of 2011-12. Moreover, fertilizer production with a weight of 1.25% registered a growth of 5.0% in November 2012 against its negative growth at 6.7% in November 2011. While in cumulative terms, it registered a negative growth of 3.3% during April-November 2012-13 compared to a contraction of 0.7% during the same period of 2011-12.

Furthermore, Steel production along with the electricity generation with weight 6.68% and 10.32% registered growth 6.0% and 2.3% in month under review against its 10.5% and 14.4% growth in November 2011. Cumulatively, Steel production registered 3.4% growth during April-November 2012-13 compared to its 8.9% growth during the same period of 2011-12. Cumulative growth of Electricity generation was 4.6% during April-November 2012-13 compared to its 9.4% growth during the same period of 2011-12.

On the flip side, Coal production with a weight of 4.38% in the index, registered a de-growth of 4.4% in November 2012 compared to its positive growth at 4.9% in November 2011. Coal production recorded a growth of 6.7% during April-November 2012-13 compared to its negative growth at 4.0% during the same period of 2011-12.

Cement and natural gas, which occupies 2.41% and 1.71% weight age in index have also registered negative growth of 0.2% and 15.2% in November 2012 compared to their growth of 17.0% and (-) 10.1% in November. Cumulatively, cement and natural gas production recorded growth of 6.7% and (-) 13.1% during April-November 2012-13 compared to its growth at 4.8% and (-) 8.5% during the same period of 2011-12.

The growth of eight core sectors slipped to four-month low of 1.8 percent in November reflecting the economic slowdown.  The decline in core sector growth in November, 2012 was on account of negative growth registered in the production of coal, natural gas and cement and deceleration in growth rates of electricity, steel and petroleum refinery products. Contraction in growth of core sectors will have the implications on industrial production data for November to be released later next month.