Moneycontrol
Dec 01, 2016 08:02 AM IST | Source: Moneycontrol.com

October core sector output up 6.6%, highest since April

Strong performance led by steel, cement and petroleum refinery surged core sector growth to 6.6 percent in October, highest since April. The combined index of eight core industries now stands at 188.1 in October, which is 6.6 percent higher compared to October 2015.


Strong performance led by steel, cement and petroleum refinery surged core sector growth to 6.6 percent in October, the highest since April. The combined index of eight core industries stood at 188.1 in October, which is 6.6 percent higher compared to October 2015. Its cumulative growth during April to September FY17 is 4.9 percent.

The eight core industries comprise nearly 38 percent of the weight of items included in the Index of Industrial Production (IIP).

Coal


Coal production (weight: 4.38 percent) declined by 1.6 percent in October over corresponding period last year. Its cumulative index during April to October FY17 increased by 0.7 percent over corresponding period of previous year.


Crude Oil


Crude oil production (weight: 5.22 percent) declined by 3.2 percent in October over corresponding period last year. Its cumulative index during April to October FY17 declined by 3.3 percent over the corresponding period of previous year.


Natural Gas


The natural gas production (weight: 1.71 percent) declined by 1.4 percent in October against year-ago period. Its cumulative index during April to October FY17 declined by 4.0 percent over the corresponding period of previous year.


Refinery Products (93 percent of Crude Throughput)


Petroleum refinery production (weight: 5.94 percent) increased 15.1 percent (y-o-y) in October. Its cumulative index during April to October FY17 increased by 8.9 percent over the corresponding period of previous year.


Fertilizers


Fertilizer production (weight: 1.25 percent) increased by 0.8 percent in October, 2016 over October, 2015. Its cumulative index during April to October, 2016-17 increased by 4.8 percent over the corresponding period of previous year.


Steel (Alloy + Non-Alloy)


Steel production (weight: 6.68 percent) increased by 16.9 percent in October, 2016 over October, 2015. Its cumulative index during April to October FY17 increased by 8.5 percent over the corresponding period of previous year.


Cement


Cement production (weight: 2.41percent) increased by 6.2 percent last month (Y-o-Y).


Electricity


Electricity generation (weight: 10.32percent) increased by 2.8 percent in October year-on-year.

In an interview with CNBC-TV18, Saugata Bhattacharya, Chief Economist, Axis Bank, said that the growth is mainly due to festive demand from both consumer durables and automobile sector. Construction in real estate may not have contributed too much to this. "It is unlikely that in November we will see a growth number as high as seen in the last three months," said Bhattacharya.

Maintaining a positive stance, he said many upcoming highway projects will ramp up cement production. He added that revival in the real-estate sector, with interest rates and prices coming down, will contribute towards cement sector.

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