Eight core industries' output contracts 23.4% in May

Contracting for the third month in a row, the output of eight core infrastructure industries shrank by 23.4 per cent in May, due to the coronavirus-induced lockdown, according to an official data.

The eight-core sectors had expanded by 3.8 per cent in May 2019, the data released by the Commerce and Industry Ministry on Tuesday showed.

Barring fertiliser, all seven sectors - coal, crude oil, natural gas, refinery products, steel, cement, and electricity - had recorded negative growth in May.

The output of coal, natural gas, refinery products, steel, cement and electricity declined by 14 per cent, 16.8 per cent, 21.3 per cent, 48.4 per cent, 22.2 per cent, and 15.6 per cent, respectively.

During April-May 2020-21, the sector's output dipped by 30 per cent as compared to positive growth of 4.5 per cent in the same period the previous year.

"In view of nationwide lockdown during April and May 2020 due to COVID-19 pandemic, various industries - coal, cement, steel, natural gas, refinery, crude oil etc experienced a substantial loss of production," the ministry said in a statement.

These eight industries account for 40.27 per cent in the Index of Industrial Production (IIP).

In April, the sectors' output contracted by a record 37 per cent.

Commenting on the data, Icra Ltd Principal Economist Aditi Nayar said that the pace of contraction in the core sector industries narrowed appreciably in May.

"Based on the available trends, we expect the pace of contraction in the IIP (factory output) to narrow to around 35-45 per cent in May 2020 from 55.5 per cent in April 2020," she said.