Infrastructure sectors grew at five-month low rate of 2.8 per cent in May, slipping from a four-year high of 8.5 per cent in previous month, as oil and natural gas output contracted.
The eight infrastructure sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity — had expanded by 4.4 per cent in May 2015. The eight core sectors comprise nearly 38 per cent of total industrial production.
In April, these sectors grew at an over four-year high rate of 8.5 per cent, helped by double-digit expansion in refinery products and electricity generation.
The May growth numbers are the lowest since December last when the core sector had expanded by just 0.9 per cent.
A decline in production of crude oil (-3.3 per cent) and natural gas (-6.9 per cent) dragged the growth rate to a five-month low.
Also, growth in output of refinery products (1.2 per cent), cement (2.4 per cent) and electricity (4.6 per cent) also slowed down in May as compared to the same month last year. These segments had expanded by 7.8 per cent, 2.7 per cent and 6 per cent, respectively in May 2015.
Coal output growth was also lower at 5.5 per cent in May this year compared to 7.6 per cent in year-ago period.
Only fertiliser and steel output recorded healthy growth. It increased by 14.8 per cent and 3.2 per cent in the month under review.
During April-May 2016-17, the growth of eight core infrastructure sectors increased by 5.5 per cent from 2.1 per cent in the same period last year.
Commenting on the core sector growth numbers, ICRA said slowdown in May suggests a low likelihood of a meaningful improvement in the performance of the IIP in the just-concluded month.
“As expected, a waning of the favourable base effect for sectors such as refinery products, electricity, cement and steel, has led to a slide in core sector growth to 2.8 per cent in May from the high 8.5 per cent in April 2016,” it said in a statement.