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Core sector growth slows down to 2.6% in December 2012

Last Updated: Thursday, January 31, 2013 - 18:17

New Delhi: Contraction in the output of natural gas, coal and fertiliser has slowed down the growth of eight core sectors in December 2012 to 2.6 percent, which may have a bearing on the overall industrial production.

However, the growth in the month under review has shown a marginal improvement over the previous month, when the sectors registered a growth rate of 1.6 percent.

The key infrastructure sectors had recorded growth of 4.9 percent in December 2011.

The cumulative expansion of these industries in April - December 2012 slowed to 3.3 percent from 4.8 percent in the same period previous year, according to the official data released today.

The eight industries include crude oil, petroleum refinery products, coal, electricity, cement and finished steel and have a weight of 37.9 percent in the overall Index of Industrial Production (IIP).

The decline in growth in December 2012 was "on account of negative growth witnessed in the production of coal, natural gas and fertiliser", it said.

Economists said that the under performance of the core sectors points towards economic slowdown. These numbers will have implications on industrial production data for December to be released later next month.

"These sectors are continuously under performing. It will have its effect on IIP as well," Crisil chief economist D K Joshi said.

Belying expectations of recovery, economic growth slipped further in the July-September quarter to 5.3 percent, raising fears that the slowdown may pull down the annual growth rate to decade's low level.

Production of natural gas and coal contracted by 14.9 percent and 0.2 percent, respectively, in the month under review. Fertiliser output too shrunk by 3.8 percent against 0.8 percent growth in December 2011.

Steel and electricity production slowed to 5.2 percent and 4.4 percent, respectively, in the reported period against 10.2 percent and 8.9 percent, respectively, in the year-ago period.

Cement output slowed to 3.9 percent from 13.6 percent in December 2011.

However, crude oil and petroleum refinery output grew by 1 percent and 5 percent against the fall of 5.5 percent and 0.7 percent, respectively, in December 2011.

The growth of eight core sector industries had declined to 1.8 percent in November 2012.


First Published: Thursday, January 31, 2013 - 18:05
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