The volume of production in eight core industries grew at 2.1% in July 2019, the poorest growth in July in the last six years. As products from such industries serve as base inputs for others, for instance fertilizers for agriculture, cement for agriculture, etc., this may impact the gross domestic product (GDP) growth rate of the second quarter of financial year 2019-20. This does not bode well as the GDP growth rate was limited to only 5% in the first quarter of the ongoing financial year.
How to read the chart
The chart shows the year-on-year growth rate (in %) of the index of eight core industries, a composite figure which measures the volume of production, in July 2019 (represented by the red circles); in every July in the last six years (represented by the blue circles); and in other months in 2019 (represented by the yellow circles). An observation is made by comparing the latest month’s figures with the rest of the months in each core industry.
Where does the growth rate of the core sectors in July 2019 stand
The overall index recorded the slowest growth in July 2019 for the month in the last six years and its growth was better than only two months so far this year. It had grown by 7.3% in July 2018
Coal, crude oil, refinery products and natural gas registered negative year-on-year growth rates. The coal sector registered the slowest growth in July 2019 for the month in the last six years and its growth was also the poorest compared to the other months of 2019. Growth in the crude oil sector in July 2019 was better than most months of this year but was one of the poorest for the month in the last six years.
Since growth in production of the coal sector fell, the electricity sector took a hit too. Its growth rate reduced to 4.2% down from 8.1% in June 2019.