Eight Core Industries’ Output Contracts 8.5% In August
An employee welds armor-plating to the roof of a car at a factory in Jalandhar, Punjab, India. (Photographer: Anindito Mukherjee/Bloomberg)

Eight Core Industries’ Output Contracts 8.5% In August

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Contracting for the sixth consecutive month, the output of eight core infrastructure sectors dropped by 8.5% in August, mainly due to decline in production of steel, refinery products and cement.

The production of eight core sectors had contracted 0.2% in August 2019, showed data released by the Commerce and Industry Ministry on Wednesday.

Barring coal and fertiliser, all sectors -- crude oil, natural gas, refinery products, steel, cement and electricity -- recorded negative growth in August.

During April-August 2020-21, the sectors' output dipped by 17.8% as compared to a growth of 2.5% in the same period previous year.

Also read: India’s April-August Fiscal Deficit Reaches 109% Of Budget Target

The rate of contraction in the eight key sectors has increased from July's -8%.

The output of steel, refinery products, cement, natural gas, crude oil and electricity declined by 6.3%, 19.1%, 14.6%, 9.5%, 6.3% and 2.7%, respectively.

On the other hand, coal and fertiliser sector production grew by 3.6% and 7.3%, respectively, during the month under review as against -8.6% and 2.9% rise in August 2019.

Also read: India Reports Record High Current Account Surplus Amid Demand Drop

Commenting on the numbers, ICRA Principal Economist Aditi Nayar said that based on these mixed trends, "we expect the contraction in the Index of Industrial Production to ease modestly to 6-8% in August 2020, from the initial 10.4% in July 2020".

The eight core industries accounts for 40.27% in the IIP.

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