Core sector output at 10-year low

Core sector output at 10-year low
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Highlights

Shrinks 5.8% in Oct, the 2nd consecutive month of decline: 6 of 8 core sectors see de-growth

New Delhi: Output of eight core infrastructure industries contracted for the second month in a row by 5.8 per cent in October, the lowest in over a decade, indicating the severity of economic slowdown.

As many as six of eight core industries -- coal, crude oil, natural gas, cement, steel and electricity -- saw a contraction in output in October.

Coal production fell steeply by 17.6 per cent, crude oil by 5.1 per cent, and natural gas by 5.7 per cent, according to the data released by the government on Friday.

Production of cement (- 7.7 per cent), steel (- 1.6 per cent), and electricity (- 12.4 per cent) also declined during the month.

The only sector that posted growth in October was fertilisers where production increased by 11.8 per cent year-on-year.

Growth in output of refinery products slowed down to 0.4 per cent in October as against 1.3 per cent in the same period last year. The eight core sectors had expanded by 4.8 per cent in October 2018.

During the April-October period, the growth of core industries fell to 0.2 per cent against 5.4 per cent in the year-ago period.

Output of these sectors had contracted by 5.1 per cent in September, the lowest in the decade.

Commenting on the data, Icra Ltd said based on the unfavourable performance of the core sector, the contraction in the IIP appears set to deepen in October 2019.

"The sharp worsening in the performance of electricity generation and cement in October 2019, offset the sequential improvements in refinery production, fertilisers and coal, resulting in an even deeper contraction of the core sector output in that month," it said in a statement.

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