Lockdown ease hurls output of 8 core industries at slower pace in June
The contraction of output of the eight-core industries slowed its pace, as the output contracted by 15 per cent YoY in June 2020, as compared to its negative growth of 22 per cent YoY in the month of May 2020. This was when relaxation over people’s movement was in control i.e. after June 1, 2020. Apart from fertilisers’ sector, all other core sectors recorded a decelerated growth.
On the back of a slow pick up in industrial and commercial activities, the production of coal saw a much sharper contraction of 15.5 per cent YoY in June 2020, as compared to May 2020. The production of crude oil witnessed a contraction for 31 successive months. In June, it contracted by 6 per cent YoY as compared to 7 per cent YoY in May 2020. Whereas, electricity production witnessed a contraction for four successive months, which eased in June amid the improvement in electricity demand as the economic activities resumed.
In the first quarter of FY2020-21, the growth of core sectors contracted by 24.7 per cent YoY. Steel and cement industries recorded a steep contraction of over 30 per cent. This echoes the impact of the nationwide lockdown levied due to COVID-19, during which, the industries experienced a substantial loss in its production.
Further, the extension of lockdowns at the state level due to a surge in COVID-19 cases can continue to impact the production strength of various industries. Therefore, even though the negative growth in core sectors may linger, its pace might see an improvement.