Eight Core Industries

Infrastructure output contracts to 5.8% YoY led by lower production of coal and steel

Published monthly by the Ministry of Commerce and Industry. Updated till October 2019 (Published on November 29th, 2019).
Note: The YoY%, 3m average and MoM% series have been calculated over the seasonally-adjusted series.

Recent Data Trend

Production of eight core industries (which indicates the infrastructure output of the country) further contracted to -5.8% year-on-year (YoY) in October 2019 from -5.2% YoY growth seen in the previous month. It is the lowest level of growth seen since the construction of the index with the new base year 2011-12. While the deterioration was witnessed in all components, contraction in the production of coal (highest constituent in the overall core sector index) and steel are the major contributors to the slowdown in core activities.

Coal production contracted for the fourth consecutive month to -17.6% YoY in October. The extended monsoons could have weighed on coal production. There was also a significant contraction in electricity production to -12.4% YoY in October 2019, the lowest growth recorded since the new base year 2011-12. Declining demand within the industrial and commercial sectors (which consume around 40% of electricity produced) seems to have led to the decline in electricity generation.

At the same time, production of steel also contracted to an almost four year low of -1.6% YoY in October 2019 compared to -0.3% YoY in September 2019 owing to a slowdown in demand in key sectors such as consumer durables and decline in infrastructure spending.

The growth in output of fertilisers was the only component that was an exception among the core components registering a double-digit growth of 11.8% YoY in October. One possible reason could be the rise in agricultural activities due to seeds sown in Rabi season.

Given the contraction registered in the core sector, negative growth in industrial production, as measured by IIP, seems likely as the core sector constitutes 40% of the items included in IIP. The cumulative growth of the eight-core sector for this year so far, April-October 2019, is 0.2% reinforcing the economic slowdown.

Brief Overview 

The data on production of eight core industries of India is published monthly by the Ministry of Commerce and Industry. The current base year for the index of the series is 2011-12=100. The eight core industries included are- Coal, Crude oil, Natural Gas, Petroleum refinery products, Fertilizer, Cement, Steel, and Electricity generation. These eight industries comprise 40.27% of the weight of the items included in the Index of Industrial Production.

For more information visit the official government website.

Next Release Date: December 31st, 2019

Production of Eight Core Industries-Quarterly

Note: The QoQ% has been estimated onn the seasonally-adjusted series.

Production of Eight Core Industries-Annual

Note: The data in the above graph is of the base year 2004-05=100 and has been discontinued since March 2017.