Even as a robust 6.8 per cent growth in overall industrial production in July had raised hopes of an early economic recovery, the growth in six core industries slumped to 1.8 per cent during the month, mainly owing to the poor shows by sectors such as petroleum refining and steel.
Amid the confusing signals emanating from the production data over the last two months, analysts warned against hasty inferences saying that a one-month drop or pick-up should not be taken as an indicator.
Although the 1.8 per cent growth in the six infrastructure industries in July appears to be a definite slump from the 5.1 per cent growth witnessed in the same month last year, the same core sector, it may be recalled, had notched up a growth of 6.8 per cent in June which contributed in a major way to an overall industrial growth of 7.8 per cent that month.
This holds true in view of the fact that the core sector, comprising crude oil, petroleum refinery, coal, electricity, cement and finished steel, together account for 26.68 per cent in the Index of Industrial Production (IIP).
Largely contributing to the dismal core sector show this July was a steep growth contraction of 14.4 per cent in petroleum refinery production as compared to a positive growth of 11.8 per cent growth in the same month a year ago. The production of crude oil improved a tad at lower rates but remained in negative territory with a growth of (-)0.4 per as compared to a growth of minus three per cent.
The other poor performer was the steel sector which saw a production growth of a mere 1.2 per cent during the month as against a healthy growth of six per cent in July 2008. However, the other three industries — cement, coal and electricity — achieved higher growth rates of 10.6 per cent, 9.7 per cent and 3.3 per cent, respectively.
