The index of eight core industries registered a growth of 2.6 per cent in August 2015 compared to its levels in August 2014. This is significantly higher than the 1.1 per cent registered in July.
Five out of eight of the sectors registered a growth of more than five per cent in August. The three that failed to hit this mark were coal, natural gas, and steel.
The strongest growth came from the fertiliser sector, which grew a whopping 12.6 per cent in August compared to 8.6 per cent in July. This marks the highest level of growth the sector has achieved since May 2014 when it grew at 17.5 per cent.
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The crude oil sector broke its short phase of contraction with growth coming in at 5.6 per cent in August following two months of growth numbers being negative. The refinery products sector also saw strong growth in August, at 5.8 per cent compared to 2.9 per cent in July.
Growth in electricity production accelerated for the second month in a row, at 5.6 per cent in August compared to 3.5 per cent in July and 0.2 per cent in June. Cement production also saw a similar growth trend, coming in at 5.4 per cent in August up from 1.3 per cent in July.
Coal production grew marginally in August, by 0.36 per cent compared to 0.3 per cent in July, which was the lowest it had been since October 2013. Natural gas production — which grew by 3.7 per cent in August — was in the positive for the first time in nearly five years. The last time the sector saw any growth was in November 2010.
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The steel sector was the only one out of the eight core sectors that saw a contraction, which accelerated to -5.9 per cent in August compared to -2.5 per cent in July. This is probably due to the increased import of cheap steel from China due to the devaluation of yuan.
The data from the core sectors, many of which are integral to the manufacturing process, is at odds with the private sector PMI data for August, which fell to 52.3 from 52.7 in July. This index is a measure of the economic health of the manufacturing sector.