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India Infrastructure Output Contracts to Lowest in 14 Years

Index of eight core infrastructure industries, which comprises output of coal, crude oil among others, declined 5.2% in September.

India Infrastructure Output Contracts to Lowest in 14 Years
Cranes operate at a construction site at the Pragati Maidan exhibition grounds in New Delhi, India. (Photographer: Anindito Mukherjee/Bloomberg)  

(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.

India Infrastructure Output Contracts to Lowest in 14 Years

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

Get More

  • To read the full statement, click here

--With assistance from Atul Prakash.

To contact the reporter on this story: Karthikeyan Sundaram in New Delhi at kmeenakshisu@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Abhay Singh, Tuhin Kar

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