Core sector growth slows down to 3.4% in January

Core sector growth slows down to 3.4% in January NEW DELHI: Core sector growth slipped to a five month low in January but remained (बने) comfortably in the positive zone. Contraction in the output of refinery products, fertiliser and cement pulled down (नीचे खींच लिया) the index that tracks growth in eight infrastructure (आधारिक संरचना) sectors.  Data on Tuesday showed the core sector slowed to 3.4% in the month compared with 5.7% in the year-ago period. The eight infrastructure sectors of coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity that make up the index have a 38% weight in the Index of Industrial Production (IIP).

“Core sector growth slipped in January 2017 relative to the previous month, as the spike in steel expansion eased to some extent. Additionally, cement, electricity and refinery products recorded some loss of momentum,” said Aditi Nayar, principal economist, ICRA Ltd.

The slower core sector is likely to dent industrial growth further. Industrial production contracted 0.4% in December. Data for January will be released on March 10.

Core sector growth in January was the lowest since August 2016, when the segments had recorded a growth of 3.2%. It is also lower than that of 5.6% seen in December 2016. The output of refinery products, fertiliser and cement contracted by 1.5%, 1.6% and 13.3%, respectively.

Coal and electricity output rose 4.8% each in January, against 7.9% and 11.6% expansion, respectively(क्रमश:, ) in January last year. Crude oil output grew 1.3% in January this year, against 4.7% contraction in the year-ago month. Natural gas and steel output rose 11.9% and 11.4%, respectively.