Core sector growth slows down to 19-month low to 0.4% in June

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Infrastructure growth in eight core sector fell to 19-month low of 0.4 per cent in June due to decline in output of coal, refinery products, fertiliser and cement, official data showed.
growth slows

The growth rate of eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — was 7 per cent in June last year.

The production of coal declined by 6.7 per cent, refinery products by 0.2 per cent, fertiliser by 3.6 per cent and cement by 5.8 per cent, as per the data of the commerce and industry ministry.

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Crude oil output rose to 0.6 per cent last month as against a decline of 4.3 per cent in June 2016.

According to the data, natural gas output rose by 6.4 per cent in June.

Steel production and power generation slowed to 5.8 per cent and 0.7 per cent in June this year from 8.8 per cent and 9.8 per cent in the same month last year, respectively.

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Slow growth in key sectors would also have implications on the Index of Industrial Production (IIP) as these segments accounted for about 41 per cent to the total factory output.

In May, these eight sectors had recorded a growth rate of 4.1 per cent.

The previous low was recorded in November 2015, when the sectors’ output had declined by 1.3 per cent.

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During April-June period of the current fiscal, growth of the eight core segments slowed down to 2.4 per cent against 6.9 per cent in the same period last year.

Rating agency ICRA said: “Available indicators present a subdued picture for industrial growth for June 2017, with the sequential decline in growth of non-oil exports, core sector output and automobile production.”

(With PTI inputs)

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