Eight core industries’ output contracts 2.6 percent in Nov

Contracting for the ninth consecutive month, the output of eight core infrastructure sectors dropped by 2.6 per cent in November, mainly due to decline in production of natural gas, refinery products, steel and cement.

The production of eight core sectors had recorded a growth of 0.7 per cent in November 2019, data released by the commerce and industry ministry showed on Thursday.

Barring coal, fertiliser and electricity, all sectors — crude oil, natural gas, refinery products, steel and cement — recorded negative growth in November 2020.

During April-November, the sectors’ output dropped by 11.4 per cent as compared to a growth of 0.3 per cent in the same period of the previous year.

The output of crude oil, natural gas, refinery products, steel and cement declined by (-)4.9 per cent, (-)9.3 per cent, (-)4.8 per cent, (-)4.4 per cent, and (-)7.1 per cent, respectively, in November this year.

On the other hand, coal and electricity sector output grew by 2.9 per cent and 2.2 per cent during the month under review.

Fertiliser sector growth stood at 1.6 per cent as against 13.6 per cent in the same month last year.

The eight core industries account for 40.27 per cent of the IIP.

In October, the output of these eight key sectors had contracted by 0.9 per cent, while there was a 0.1 per cent dip in September this year.

Aditi Nayar, Principal Economist, ICRA, said that in line with the core sector performance, the pace of growth of many other indicators slipped in November, reflecting a combination of the base effect, fewer working days on account of a shift in the festive calendar, and a potential step-down in production following the satiation of pent-up demand.

“Based on the available information, we expect the IIP to revert to a temporary but unpalatable 2-5 per cent contraction in November 2020,” she said.

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