India’s Core Industries Output Rises 2.4% In July 2017
The combined index of eight core industries stands at 119.8 in July 2017, which was 2.4 per cent higher compared to the index of July 2016, informed the Ministry of Commerce in an official statement released on Thursday (31 August).
The eight core industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP).
Its cumulative growth during April to July, 2017-18 was 2.5 per cent.
According to Indian credit ratings agency (ICRA), “The modest uptick in core sector growth in July 2017 relative to the previous month was driven by a favourable base effect for steel, cement, fertilizers and electricity. Nevertheless, half of the eight constituents recorded a YoY contraction in July 2017, namely, refinery products, crude oil, cement and fertilisers.”
“There was mixed evidence of post-GST inventory re-building, with a robust pickup in growth of steel output in July 2017 (9.2 per cent) relative to June 2017 (5.8 per cent), in contrast to the continued, albeit narrowing contraction in production of cement (-2 per cent in July 2017 versus -6.3 per cent in June 2017). Cement output contracted for the eighth month in a row.”
“The early indicators for industrial production in July 2017 offer mixed trends, with the sharp improvement in YoY expansion of automobile production and modest rise in core sector growth, juxtaposed with the slowdown in growth of non-oil merchandise exports and the sub-50 PMI reading. Given the favourable base effect and the rebuilding of domestic inventories post-GST, we expect the IIP to revert to a YoY rise in July 2017, although the pace of growth may be subdued relative to the 5.2 per cent recorded in July 2016.”
The individual indices of the eight core industries are:
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