Growth of Eight Core Industries (ECI) surges to 4.9% in August – Is the economy starting to pick up?

The growth of the Eight Core Industries (ECI), representing the output of major industrial sectors like coal, steel, cement and electricity has reached 4.9% in August which was only 2.9% for the month of July.

ECI had risen by 3.1 per cent last year in the corresponding month.

The eight core industries constitute 40.27% of the weight of items included in the Index of Industrial Production (IIP).

“The combined Index of Eight Core Industries stands at 123.6 in August, 2017, which was 4.9 per cent higher compared to the index of August, 2016,” the Ministry of Commerce & Industry said in the summary of the ECI for August.

“Its cumulative growth during April to August, 2017-18, was 3 per cent.”

Sector Focus: Electricity Generation rises the most; Cement, Fertilizer and Crude lags

Refinery Production, having the highest weightage of 28.03, grew by 2.4% in August 2017 as compared to August 2016.

Electricity generation, which has the second highest weightage of 19.85, rose by 10.3 per cent.

Steel production, the third, with weightage of 17.92, increased by 3% during the August month, whereas coal mining, with a 10.33 weightage, rose by 15.3% in August 2017.

Extraction of crude oil, which has an 8.98 weightage, slipped by 1.6% during the month under review. On the other hand, the sub-index for natural gas output, with a weightage of 6.88, stood higher by 4.2%.

Conversely, cement production, which has a weightage of 5.37, decreased by 1.3 % in August 2017.

Lastly, fertilizer manufacturing, which has the least weightage — of only 2.63 – dipped by 0.7%.