Core Industries Growth Falls To 3.1% In Dec; Cement, Electricity Saw Positive Growth (31-Jan-2012)
Reflecting slowness in industrial activity, the overall growth of eight core industries has dipped to almost half in December as compared to the same period in the last fiscal. According to the data released by the Commerce and Industry Ministry, the combined index for the month of December 2011 grew at the rate of 3.1% as compared to 6.3% growth in December 2010.
During April-December 2011-12, the cumulative growth rate of the core industries was 4.4% as against their growth at 5.7% during the corresponding period in 2010-11. The eight core industries namely coal, steel, cement, refinery products, electricity, natural gas, fertilizers and crude oil have a combined weight of 37.90% in the Index of Industrial Production (IIP), and are considered fair indicators of the growth of infrastructure and factory output in the economy. The lack of demand due to the global slowdown and the high interest rate regime seemed to have hit investments in the core industries, bringing down their growth rates.
The most drastic dips came in the growth of crude oil, petroleum refinery products and steel. These three products also happen to be the heaviest in the index. Crude Oil production (weight: 5.22%) registered a growth of (-) 5.6% in December 2011, a drastic fall as compared to its growth at 15.8% in December 2010. Cumulatively crude oil production registered a growth of a meager 1.9% during April-December 2011-12, compared to its growth at 12.0% during the same period of 2010-11.
Petroleum refinery production (weight: 5.94%) had a growth of 0.8% in December 2011, down substantially from its growth of 8.3% in December 2010. In cumulative terms petroleum refinery production registered a growth of 4.1% during April-December 2011-12, compared to its 1.7% growth during the same period of 2010-11. Steel production (weight: 6.68%) had a growth rate of 2.2% in December 2011 against its 9.4% growth in December 2010. Cumulatively steel production had a 7.5% growth during April-December 2011-12 compared to its 8.3% growth during the same period of 2010-11.
The sectors that saw a positive growth were cement, electricity and coal. Cement production registered a growth of 13.3% in December 2011 against its (-) 2.2% growth in December 2010. The cumulative growth of cement production was 5.3% during April-December 2011-12 compared to its 4.4% growth during the same period of 2010-11.
Electricity generation had an 8% growth in December 2011 compared to its 5% growth in December 2010. Electricity generation on the other hand had a cumulative growth of 9.2% during April-December 2011-12 as against its 4.7% growth during the same period of 2010-11. Moreover, coal production had a growth of 5.6% in December 2011 compared to its growth at 3.8% in December 2010. However, in cumulative terms coal production had a negative growth of (-) 2.7% during April-December 2011-12 compared to its growth at 0.8% during the same period of 2010-11.
The industrial production can be expected to turn around, given that the RBI goes for a rate cut in the near term. If this happens, we could see some improvement in GDP numbers of the third quarter of FY12, as compared to its second quarter. Industrial output had contracted in October by 4.7%, but rebounded by a 5.9% growth in November. With the recent numbers showing sluggishness, industrial production in December is expected to slowdown due to the high base effect and also due to the recent lag of improvement in coal output.
Top News Today
 National Thermal Power Corporation (NTPC) will be signing the fuel supply agreements' (FSA) with Coal India for 4,300 megawatts on 2009 terms. In these FSAs companies have change trigger level, which has
 After cellular market leader Bharti Airtel launched its 4G services, now Reliance Industries is reportedly gearing up to launch the services soon and has accordingly partnered with Himachal Futuristic
 Wipro's IT, consulting and outsourcing business Wipro Technologies is likely to introduce India Gateway internship programme for UK university students in July 2012. This internship program consists of
|
International Stock News
 US markets got a good bounce back on Monday with all major indices gaining more than 1%, it was one of the best session of the month. There was some M&A activity along with report that Chinese government
 US markets declined further on Friday, making it the worst week for the markets in 2012, as the most awaited Facebook (FB) IPO was only able to muster a slight gain in its public debut, while the eurozone
 Thursday proved another bad day for the US markets with major indices losing over one to two percent as eurozone debt contagion worries continued, coupled with disappointing economy news. A read on manufacturing
|
|
|