India’s core sector growth rebounds to 2% in September

New Delhi: India's core sector output, which accounts for about two-fifths of industrial production, rebounded during September after falling to a 42-month low the previous month. Five of the eight core sectors reported positive growth during September.

The index of the eight core industries rose by 2% annually in September after contracting by 1.6% in August, according to provisional data from the commerce ministry on Wednesday. A year ago, the output of the eight core industries—coal, crude oil, steel, cement, electricity, fertilisers, refinery products and natural gas—had expanded 9.5% year-on-year.

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The provisional data for July, August and September could be revised next month.

The rebound in manufacturing could significantly affect industrial production in September, data for which will be released in November.

Sector-wise performance

Five of the eight sectors — coal, steel, cement, fertilisers and refinery products — reported an annual rise in production in September, while the output of crude oil, electricity and natural gas contracted.

• Coal production rose by 2.6% in September after an 8.1% contraction in August.
• Crude oil production contracted by 3.9% during the month against a 3.4% fall the previous month.
• Natural gas production fell by 1.3% in September versus a 3.6% fall in August.
• Refinery products output rose by 5.8% compared to a 1% contraction in the previous month.
• Steel production grew 1.5%, against 3.9% growth in August.
• Fertiliser output grew 1.9% in September, compared to 3.2% growth in the previous month.
• Cement production rose by 7.1% in September, against a 3% fall in August.
• Electricity production fell 0.5%, after contracting by 3.7% the previous month.

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Manufacturing activity drops

Incidentally, India’s manufacturing activity fell to an eight-month low in September as rates of expansion in factory production and sales receded, and international orders rose at the slowest pace in a year and a half, according to data released in early October.

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The HSBC final India Manufacturing Purchasing Managers Index (PMI), compiled by S&P Global, stood at 56.5 in September, down from 57.5 in August, 58.1 in July, 58.3 in June, 57.5 in May, and 58.8 in April.