Infra sector output at 6-month high in May

Tribune News Service

New Delhi, June 30

The output of eight infrastructure sectors expanded by 4.4% in May, the highest growth rate in the past six months, on the back of upsurge in production of coal and refinery products.

The output of eight core sectors had declined in the previous two months of March and April. The core sectors had expanded at a rate of 3.8% in May 2014.

The growth in May 2015 was driven by healthy output of coal (7.8%), refinery products (7.9%) and electricity generation (5.5%).

Aditi Nayar, senior economist, ICRA, said the 4.4% growth recorded by the core sector industries comes as a respite on the back of the contraction recorded in the previous two months. Additionally, the relatively broad-based improvement across the eight core industries in May 2015 relative to the performance in the previous month as well as the expansion recorded by seven of the eight industries is encouraging.

She added that the sharp improvement in performance of refinery products in May 2015 as compared to April 2015 partly benefits from a favourable base effect.

The turnaround in the performance of electricity generation in May 2015 was led by both thermal and hydroelectricity. Excess rainfall in June 2015 and its associated impact on reservoir levels are expected to sustain the uptick in hydroelectricity generation (8% growth in May 2015) in the immediate term.