Core sector output contracts 1.3% in November

Cement, steel contributed the most to this de-growth

The combined output of eight crucial infrastructure sectors contracted by 1.3% in November, pulled down by a steep fall in steel production.

The industries carry a total weight of nearly 38% in the Index of Industrial Production (IIP) continue to be hit by falling international crude oil prices coupled with weakening global consumer and industrial demand.

Data released by the ministry of Commerce and Industry on Thursday showed the eight core industries — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — grew by a cumulative 2% in the months leading up to November in the current FY16.

While core sector growth had stood steady at 3.2% for the last two months, the fall in November figures were brought on by continued and accelerating decline in crude oil, natural gas and steel output.

Following global cues, steel production crashed by 8.5% in November as compared to a year back in 2014. Fall in steel production had been slowly easing until October.

Crude oil and natural gas witnessed the same trend, decreasing by 3.3% and 3.9% over November, 20014. While Oil production has cumulatively declined by 0.4% in the current fiscal year, natural gas has gone down by 2.3% in the same period.  

However, refinery products have registered a turnaround, growing at 2.5% as compared to the 4.4 % drop in the previous month. Same was true for coal which rose by 3.5%.

On the other hand, cement production turned negative with a 1.8% fall after significantly rising in October.

Fertilisers continued to be the top gainer rising 13.5% in November although rate of growth is slowly decreasing.

Elsewhere, electricity generation remained unchanged from October with nil growth.