Infra growth slows down in August

Growth in infrastructure industries like steel and cement slowed down to 3.5 per cent in August, raising concerns over slackening of economic activities .

The eight core infrastructure industries had expanded by 4.4 per cent in August 2010.

These industries - crude oil, petroleum refinery products, natural gas, fertilisers, coal, electricity, cement and finished steel - have a weight of 37.90 per cent in the overall Index of Industrial Production (IIP). The slowdown in these segments will weigh on the IIP numbers for August which are due to be released on October 12.

"The numbers are reflecting that it would not have a positive impact on the IIP in the coming months...IIP will be weak," Crisil Principal Economist DK Joshi said.

Electricity, steel and cement output grew by 8.9 per cent, 7.7 per cent and 7.2 per cent in August, respectively, according to the provisional data released today.

In the same month last year, electricity production had grown by 1.6 per cent, while steel and cement sectors had posted 10.8 per cent and 1.6 per cent expansion, respectively.

Crude oil production grew by 1.6 per cent in the month under the review against 15.2 per cent in the comparable period last year.

Petroleum refinery products output grew by 3.9 per cent in August. In the same month last year, the sector had witnessed a contraction of 2.3 per cent. Fertiliser output increased by 4.3 per cent in August. It was -5.7 per cent in the same period last year.

However, natural gas and coal output contracted by 5.3 per cent and 15.3 per cent in August, respectively.