Core sector growth slows down to 2.6% in December 2012

Contraction in the output of natural gas, coal and fertiliser has slowed down the growth of eight core sectors in December 2012 to 2.6%, which may have a bearing on the overall industrial production.

However, the growth in the month under review has shown a marginal improvement over the previous month, when the sectors registered a growth rate of 1.6%.

The key infrastructure sectors had recorded growth of 4.9% in December 2011.

The cumulative expansion of these industries in April - December 2012 slowed to 3.3% from 4.8% in the same period previous year, according to the official data released on Thursday.

The eight industries include crude oil, petroleum refinery products, coal, electricity, cement and finished steel and have a weight of 37.9% in the overall Index of Industrial Production (IIP).

The decline in growth in December 2012 was "on account of negative growth witnessed in the production of coal, natural gas and fertiliser", it said.

Economists said that the under performance of the core sectors points towards economic slowdown. These numbers will have implications on industrial production data for December to be released later next month.

"These sectors are continuously under performing. It will have its effect on IIP as well," Crisil chief economist DK Joshi said.

Belying expectations of recovery, economic growth slipped further in the July-September quarter to 5.3%, raising fears that the slowdown may pull down the annual growth rate to decade's low level.