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    Core sector output growth slows to 2.6% in December 2018

    Synopsis

    The combined Index of Eight Core Industries stood at 132.1 in December, 2018, which was 2.6 per cent higher as compared to the index of December, 2017. Its cumulative growth during April to December, 2018-19 was 4.8 per cent.

    Eight core sector output growth slows down to 2.6% in December 2018
    New Delhi: The growth of India’s infrastructure industries slowed to an 18-month low in December, brought down by coal, crude and fertilisers, data released by the commerce and industry ministry showed Thursday.

    The index of eight core industries rose 2.6% in December, the lowest since a 1% expansion recorded in June 2017. The core sector had grown 3.4% in November 2018 and 3.8% in December 2017.

    The eight infrastructure sectors of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity, constitute 40.27% of the total industrial production. The latest data suggest a moderation in industrial growth going ahead.

    In November, industrial production growth had slowed to a 17-month low of 0.47%. “Based on the core sector growth this month (December), we are expecting industrial output (measured by IIP) to grow by around 2.5% in Dec’18, with a downward bias due to a high base effect,” CARE Ratings said in a note. The industrial production numbers for December will be released on February 12.

    Core sector growth for April-December was 4.8% against 3.9% in the corresponding period of the previous year.
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    Coal output growth slipped to 0.9% in December from 3.7% in November, also dragging down the expansion in electricity generation to 4% from 5.1% a month before.

    Production of crude oil, refinery products and fertilisers shrank in December from a year earlier, declining 4.3%, 4.8% and 2.4%, respectively. In the case of refinery products, which has the highest weight in the index, this was the first contraction in 16 months.

    Steel output growth accelerated to 13.2% from 5.8% in November, while cement production was up 11.6% from 8.8%.

    “The production of natural gas grew at 4.2%, highest since May 2018,” CARE Ratings said.



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    ( Originally published on Jan 31, 2019 )
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