Core Sector growth: October 2016

Core sector growth rose to a six-month high in October on the back of impressive performance by steel and refinery products, suggesting some pickup in industrial activity before the demonetisation shock. The core sector index was up 6.6% in October. The index was up 3.8% in October 2015 and 5% in September this year.
Eight infrastructure sectors -coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity -have a 38% weight in the Index of Industrial Production. The core sector expanded 4.9% in the April-October period, compared with 2.8% a year earlier.
Steel production jumped 16.9% in October. It had shrunk 5.5% in the year-earlier period.
The output of refinery products soared 15.1% in October. The sector had declined 4.4% in October last year.
Cement output rose 6.2%, but demand may experience a temporary dip post-demonetisation, which would also affect the pace of core sector growth.
Growth in fertiliser and electricity generation was 0.8% and 2.8%, respectively, against 16.8% and 13.8%, in October 2015. Coal production fell 1.6% as against growth of 6.6% a year earlier.
Natural gas and crude oil output both fell, by 1.4% and 3.2%, respectively.

No comments: