NEW DELHI: The pace at which the eight core sectors grow slowed to 2.4 per cent in July as output of crude oil, refinery products, fertiliser and cement contracted, but that was possible by a favourable base effect for steel, cement, fertilisers and electricity.
Cumulatively, the eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — in April-July recorded a growth of 2.5 per cent against six per cent in the same period a year ago. These sectors had witnessed a 3.1 per cent growth in July last year.
“The early indicators for industrial production in July 2017 offer mixed trends, with the sharp improvement in year-on-year expansion of automobile production and modest rise in core-sector growth,” said ICRA, an analyst firm.
The Index of Industrial Production (IIP) is likely to feel the impact of slow growth as the eight core sectors account for 41 per cent to the total factory output. In June, they had recorded a growth rate of 0.8 per cent.
The production of crude oil fell 0.5 per cent, refinery products 2.7 per cent, fertiliser 0.3 per cent and cement 2 per cent.
Coal output growth decelerated to 0.7 per cent in July against 4.1 per cent in July 2016, while natural gas output rose by 6.6 per cent. Steel production and power generation was up 9.2 per cent and 5.4 per cent, respectively, in July from zero per cent and 2.1 per cent in the same month last year.
There was mixed evidence of post-GST inventory re-building, with a robust pickup in growth of steel output in July 2017 (9.2 per cent) relative to June 2017 (5.8 per cent).