Core sector growth slows down to 1.8% in November

Dec 31 2012, 21:40 IST
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These eight industries have a weight of 37.9% in Index of Industrial Production (IIP). (Reuters) These eight industries have a weight of 37.9% in Index of Industrial Production (IIP). (Reuters)
SummaryThese eight industries have a weight of 37.9% in Index of Industrial Production (IIP).

Reflecting slowdown, the growth of eight core sectors slipped to four-month low of 1.8 per cent in November, mainly due to contraction in production of natural gas, coal and cement.

The key infrastructure sectors had recorded growth of 7.8 per cent in the same month last year.

However, the eight core sector industries had registered an eight-month high growth of 6.6 per cent in October 2012. In July, the sectors grew by 1.2 per cent.

The cumulative expansion of these industries in April - November 2012 slowed to 3.5 per cent from 4.8 per cent in the same period last year, according to official data released today.

The eight industries include crude oil,petroleum refinery products, coal, electricity, cement and finished steel and have a weight of 37.9 per cent in the overall Index of Industrial Production (IIP).

"The decline in growth in November, 2012 was on account of negative growth witnessed in the production of coal, natural gas and cement and deceleration in growth rates of electricity, steel and petroleum refinery products," it said.

Economists said poor performance of core industries points towards economic slowdown. These numbers will have implications on industrial production data for November to be released later next month.

"The number clearly indicating continued slowdown in the economy. There is an urgent need to boost investments in the country. It will have its effect on IIP as well," Ficci's former secretary general Rajiv Kumar said.

Belying expectations of recovery, economic growth slipped further in the July-September quarter to 5.3 per cent, raising fears that the slowdown may pull down the annual growth rate to decade's low level.

Production of natural gas and coal contracted by 15.2 per cent and 4.4 per cent, respectively in November. Cement output too shrunk by 0.2 per cent as against 17 per cent growth in the same month last year.

Steel and electricity production slowed to 6 per cent and 2.3 per cent, respectively. In the same month last year, it was 10.5 per cent and 14.4 per cent in that order.

Petroleum refinery output also slowed down to 6.6 per cent against to 11.2 per cent last year.

However, production of fertiliser and crude oil grew by 5 per cent and 0.8 per cent in November respectively.

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