India Core Sector Growth Slows to 5.4% in July; Iron Ore Saves The Day

India’s core sector growth slowed to 5.4% on year in July from a revised 6.0% in June, even as a sharp increase in iron ore output provided a significant boost to the headline number, government data showed Thursday.

The provisional estimate for June growth was 5.0%.

Iron ore production surged 29.5% on year in July, the fastest growth among the nine core industries. Based on the sector’s 4.905% weight and index movement, iron ore contributed about 1 percentage point to overall growth. Excluding that contribution, core sector growth would have been roughly 4.4%, according to 91bps calculations.

Among the other major contributors, cement output rose 13.1%, electricity generation increased 9.0%, and coal production grew 7.6%. Steel output rose 2.9%, while refinery products increased 2.7%.

The expansion remained uneven, with natural gas output contracting 3.7%, crude oil declining 5.3%, and fertiliser production falling 8.0% from a year earlier.

The overall core industries index stood at 121.2 in July, up from 115.0 a year earlier and 120.7 in June.

Growth in the nine core industries during April-July was 4.3%, compared with 1.5% in the corresponding period a year ago. Iron ore output rose 25.2% during the four-month period, electricity 9.3%, and cement 9.9%, while coal, natural gas, crude oil, refinery products, and fertilisers contracted.