Core sector growth slows to 1.1 % in July

The index of eight core industries again saw a fall in its rate of growth, falling to 1.1 per cent in July compared to 3 per cent in the previous month.

The fertilisers sector followed up on its strong growth in June with an even stronger showing in July, growing 8.6 per cent compared to 5.8 per cent in June. The electricity sector also posted good growth figures, surging to 3.5 per cent in July from 0.17 per cent in June.

Refinery products grew the third-fastest of the eight core sectors, posting a growth of 2.9 per cent in July, although this was far slower than its May and June figures of 7.8 per cent and 7.3 per cent, respectively.

Similarly, the coal sector saw a sharp fall in July, posting a growth of only 0.3 per cent in July compared to 6.24 per cent in June. This marks the fourth consecutive month of slowing growth in the sector. Growth in cement production halved to 1.3 per cent in July compared to 2.6 per cent in June.

The natural gas sector continued to be the worst performer, with a contraction of -4.35 per cent. This, however, is a better scenario than it performance the previous month where it contracted by -5.9 per cent. Crude oil contracted for the second straight month, growing at -0.36 per cent in July compared to -0.64 per cent in June.

Steel production contracted for the first time in four months, with the sector registering a growth of -2.5 per cent in July compared to 4.9 per cent in June.

These numbers come on the back of a strong performance in the Index of Industrial Production (IIP) in June. The IIP for June was at 3.78 per cent, up from 2.5 per cent in May. This improvement was mostly driven by manufacturing, which grew 4.6 per cent in June.

However, the poor showing in July of the eight core industries in total could imply July IIP coming in lower than the June figures. The eight core industries comprise a weightage of nearly 38 per cent in the IIP.

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Printable version | Sep 26, 2021 9:00:19 AM |

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