InvestorQ : Why did the core sector number do so badly in February month?
NISHA Nayak made post

Why did the core sector number do so badly in February month?

Priyanka N answered.
1 year ago

For the month of February 2021, the core sector once again dipped into the negative at -4.6%. All the eight components of the core sectors recorded negative growth during the month. There was some good news too. For example, the revised estimates for Jan-21 and Nov-20 did see some upgrades. However, the fall in Feb-21 has been quite steep and even after upgrades it may not make any meaningful difference.

Among the various sectors in the core sector basket, Oil Refining was the worst hit with -10.9% de-growth. Another heavyweight sector, steel, also contracted after several months of positive growth. In fact, Oil Refining and Steel jointly have a weightage of 45% in the core sector basket and these could make a huge difference to the final number. Even fertilizers, electricity and coal, which are normally positive, dipped into negative territory.

This is the worst monthly performance for the core sector since August 2020 when the core sector had actually contracted -6.9% but that was largely attributable to the pandemic impact. For the 11 months of the current fiscal ended Feb-21, the overall core sector fell by -8.3% and that data is likely to put pressure on GDP growth for Mar-21 quarter. March month could see core sector expansion but the second wave of COVID could be the issue.