India Infrastructure Output Contracts to Lowest in 14 Years

(Bloomberg) -- India’s core infrastructure industries’ output contracted last month to the lowest since at least 2005, reflecting an enduring sharp weakness in economic activity.

The index of eight core infrastructure industries, which comprises output of coal, crude oil, cement and electricity among others, declined 5.2% in September, the government said in a statement Thursday. That was the second straight month of contraction.

Key Insights

• A contraction in output of coal (-20.5%), crude oil (-5.4%), refinery products (-6.7%), natural gas (-4.9%), cement (-2.1%), electricity (-3.7%) and steel (-0.3%) weighed on the overall index. Only fertilizers production rose 5.4%
• State-run Coal India Ltd.’s monthly production dropped to a record low in September as the heaviest rains in 25 years flooded mines and hindered shipments
• The core infrastructure sector accounts for 40% of total industrial production and the weakness is bound to drag down factory output, which in August saw the first decline in more than two years. The next industrial production numbers are due Nov. 12
• Expansion in Asia’s third-largest economy slowed to a six-year low of 5% in the April-June period. Gross domestic product data for the quarter ended September is due end-November

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• To read the full statement, click here

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