India’s infrastructure sector output in February expanded at its quickest pace in five months, indicating some lift in the economy as the country heads to elections.
The index of eight core sector industries rose 4.5% in February from a year earlier, compared with 1.6% in the previous month.
This is the second-highest rise in core sector index since December 2012. The fastest growth in this period was in September 2013, when the index rose 8%.
The core sector index has a 38% weight in the Index of Industrial Production (IIP), which makes it a lead indicator of industrial activity and its revival suggests industrial sector may also be picking up pace.
The eight industries in the index are coal, natural gas, refinery products, steel, cement, electricity, fertiliser and crude oil.
The improvement in the core sector is driven largely by electricity and steel, and there is some strength in the other key construction material, cement. Slower decline in natural gas production after last year’s massive fall has also contributed to the overall pickup.
Electricity generation rose 10.4% in February, highest since September, which bodes well for the manufacturing sector that had complained of power shortages. The output of the two key inputs for the construction sector – steel (up 4.5%) and cement (up 2.3%) – suggests some pickup in the sector that has borne the brunt of the economic slowdown in recent times.
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