Core sector output contracts 38% in April

Cement, steel production plummet

The lockdown imposed due to the COVID-19 pandemic resulted in core sector output contracting 38% in April 2020, compared with the same month in the previous year, according to Commerce Ministry data released on Friday.

This is the second straight month in negative territory for the index of eight core sector industries, after a 9% fall in March 2020. Last month, the Ministry had estimated a 6.5% contraction in the core sector in March, a figure that has now been revised downward to 9%.

The April collapse comes on the back of an 86% crash in cement production and an 84% contraction in steel sector output. All eight sectors saw shrinkage, although the least affected were fertilisers and crude oil, which showed a decline in production of 4.5% and 6.4% respectively.

Petroleum refinery production, the largest component of the index, shrank 24%, while electricity generation dropped almost 23%. Natural gas production fell almost 20%, while coal production declined 15.5%, from a year earlier.

These eight crucial sectors form 40% of the weight of sectors included in the Index of Industrial Production and may signal a crash in that wider index.