Core Sector Growth at 6-mth High of 4.4%

Eight key infrastructure sectors’ growth rate in May this year is the highest since November 2014, when these segments had expanded by 6.7%

Published: 01st July 2015 05:57 AM  |   Last Updated: 01st July 2015 05:57 AM   |  A+A-

NEW DELHI: After two months of successive decline, the output of eight key infrastructure sectors expanded by 4.4 per cent in May, indicating a recovery in industrial activity. This marks the highest growth rate in the past six months. The index of these eight core sectors grew by 3.8 per cent in the same month last year.

According to the Commerce Ministry data, the cumulative growth rate of the eight core industries – coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity – during the first two months of the fiscal came down to 2.1 per cent compared to 4.7 per cent during April-May 2014-15.

Growth.JPGThe eight core industries, which are a lead indicator for industrial production comprising nearly 38 per cent of the weight of items included in the Index of Industrial Production (IIP), had recorded a growth of 6.7 per cent in November last year.

Madan Sabnavis, chief economist, CARE Ratings said, “With such an improvement in the core numbers, I expect the May IIP to be somewhere between 3-4 per cent. However, there may not be correlation between IIP and core all the time. But it will be too early to call this as a recovery of the Indian industry.”

“The considerable improvement in the core sector growth would support a pick up in the pace of industrial expansion in May 2015, although the extent of the same would be tempered by factors such as an adverse base effect, contraction of non-oil merchandise exports and automobile production trends,” said Aditi Nayar, senior economist at ICRA.

“Core sector recorded its highest level of growth in the last six months in May. However, growth has been weak in the core infrastructure industries and, as such, data in the coming months would be crucial in determining if we are indeed witnessing a sustained turnaround,” said Rishi Shah, economist, Deloitte.

“The growth in steel production is encouraging but given the situation of the domestic  steel industry and global demand outlook, going forward these numbers need to be looked  at carefully,” Shah added.

Stay up to date on all the latest Business news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp