The eight key infrastructure industries grow by just 2.3 per cent in May,data from the commerce and industry ministry,released on Monday,showed.
This is a sharp slowdown when compared to the data for the same month last year,which recorded 7.2 per cent growth. The ministry attributed the decline to the contraction witnessed in the production of coal,crude oil,natural gas and fertiliser sectors.
The group of eight core industries include coal,crude oil,natural gas,petroleum refinery products,fertilisers,steel,cement and electricity. In April,the growth was 2.4 per cent. The coal sector saw a contraction in output at 3.3 per cent in May as against a growth of 3.1 per cent in April. Crude oil contracted 2.4 per cent,while last month it showed a growth of 1.2 per cent. Natural gas production contracted by of 18.7 per cent during the month. In April it recorded a drop of 17.4 per cent.
An expert said that the data showed high volatility,which made it difficult to interpret it and gauge a trend.
The core sector data is too volatile to interpret. However,the underlining trend is that the core sector industries are weak. I would be very cautious in interpreting it, said DK Joshi,chief economist,Crisil. Any trend is difficult to spot till the Index of Industrial Production (IIP) is released.
The core sector has a weight of around 38 per cent in the overall IIP. The index grew just 2 per cent in April as compared to 2.5 per cent in March. The IIP numbers for May will be released on July 12.
Steel and electricity were the only sectors which posted growth during May. While steel output grew 4.1 per cent as against 1.9 per cent in April,electricity production showed a growth of 6.2 per cent compared to 3.5 per cent in April.