Core sector growth up 5.3% in February

An increase in production of petroleum refinery items, steel, cement and fertilisers pushed up the overall growth of the eight core infrastructure industries to 5.3 per cent in February compared to the same month last year.

There was, however, a sequential slowdown as the core sectors had posted a higher growth of 6.7 per cent in January .

Growth in the core sectors during April-February 2017-18 was 4.3 per cent, according to an official release of the Commerce and Industry Ministry circulated on Monday.

The eight core industries comprise 40.27 per cent of the weight of items included in the index of industrial production.

Two sectors, crude oil and natural gas, recorded a decline in production in February, the release said.

“Despite a weak base (February 2017 was 0.6 per cent), core sector growth slowed down sequentially in February 2018 to 5.3 per cent from 6.7 per cent in January 2018. Solid cement and increasing steel sector growth suggests construction activities are gathering pace. Strong core sector growth suggests a relatively stable February 2018 IIP growth. While rising fuel prices may dampen refinery product demand and consumption a bit, strong vehicle sales will continue to drive consumption growth,” said Devendra Kumar Pant, Chief Economist, India Ratings and Research.

Petroleum refinery production (weight of 28.04 per cent) increased by 7.8 per cent over February 2017. Its cumulative index increased 4.9 per cent during April-February 2017-18 over the corresponding period of the previous year.

Cement production (weight of 5.37 per cent) increased 22.9 per cent over the comparable month last year. Its production in April-February 2017-18 was up 5.7 per cent.

Steel production (weight of 17.92 per cent) increased 5 per cent in February compared to the same month the previous year. Its cumulative index increased 5.9 per cent during April-February 2017-18 over the corresponding period of the previous year.

Fertilisers production increased 5.3 per cent compared to February 2017. Its cumulative index declined 0.2 per cent during April-February 2017-18 over the same period last year.

Rise in coal production (weight of 10.33 per cent) was lower at 1.4 per cent. Its cumulative index increased 1.6 per cent during April-February 2017-18.

Electricity generation (weight of 19.85 per cent) increased 4 per cent during the reporting month. Total electricity production increased 5.2 per cent during April-February 2017-18 over the corresponding period of the previous year.

Production of crude oil (weight of 8.98 per cent) and natural gas (weight of 6.88 per cent) declined 2.4 per cent and 1.5 per cent respectively in February compared to the same month last year. Overall production of crude oil and natural gas during the April-February 2017-18 period also declined 0.8 per cent and 1.5 per cent respectively compared to the same period last year.

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