Feb core growth slows to 1.4%; lowest in FY15

Only coal, cement and electricity increased during the month; it was 1.8% a month ago

The growth in output of eight core industries, which has a weight of nearly 38 per cent in the Index of Industrial Production, stood at 1.4 per cent in February, a 17-month low.  

The output had expanded by 6.1 per cent in February 2014. The growth was 1.8 per cent in January 2015.

The cumulative growth of core sectors during April-February stood at 3.8 per cent.

In February, the growth of core sectors came down mainly due to contraction in natural gas, steel and crude production that declined to 8.1 per cent, 4.4 per cent and 1.9 per cent, respectively, according to data released by the ministry of commerce and industry.

In cumulative terms, it was natural gas that witnessed maximum fall in the period April-February, declining 5.5 per cent  followed by crude oil at 1.1 per cent.

“The slide in the core sector growth for the second month in a row is disappointing ... Lead indicators for IIP (index of industrial production) growth for February 2015 remain bleak, such as the muted growth of core sector output and automobile production as well as the year-on-year contraction in merchandise exports,” said Aditi Nayar, senior economist, ICRA.

Output of refinery products declined 1 per cent in February, though it increased by 0.5 per cent during April-February.

Fertiliser situation in the country also looked grim with production in February falling by 0.4 per cent. Total fertiliser production during April-February also plummeted by 0.5 per cent.

“Unseasonably heavy rainfall in recent weeks is expected to adversely impact the rabi harvest and constrain rural consumption demand over the next one-two quarters,” Nayar added.

Cement production increased by 2.7 per cent in February, while posing a healthy growth of 6.1 per cent for April-February.