Cheering up the economy further, the core infrastructure industries grew by 7 per cent in October against 3.9 per cent in the same month last year, helped by robust performance of cement and crude oil sectors.

The October data for six industries — crude oil, petroleum refinery products, coal, electricity, cement and finished steel — reflected a bounce back from September when growth in these sectors had plunged to 2.7 per cent against 4.3 per cent growth in corresponding period in 2009-10.

Core Infrastructure industries that have a weight of 26.7 per cent in the Index of Industrial Production (IIP), is expected to show a positive impact on the October IIP, likely to be released next month.

Revival in the core industries comes on top of 8.9 per cent growth in the country’s Gross Domestic Product for the first half of the current fiscal.

Expansion of the economy, helped by impressive performance by the industries, including the infrastructure sector, is expected to give a boost to investment climate, HSBC Group Country Head Naina Lal Kidwai said.

“We will see more investments by industry next year because in lots of companies capacity utilisation is 90 per cent plus,” she said.

However, amid the overall good performance of core infrastructure activity, coal and petroleum refinery output remained areas of concern.

While petroleum refinery products showed a deceleration of 4.8 per cent, coal could barely grow by 0.8 per cent in October.

Cement with 16.8 per cent and crude oil with 13.7 per cent growth emerged as the top infrastructure performers in October.

The April-October cumulative performance remained unchanged at 4.5 per cent from the previous year.

Reacting to the core sector data, Principal economist with credit rating agency CRISIL D K Joshi said the slowdown in coal output was a cause of concern as it will have an impact on electricity generation.

He said the six infrastructure sectors are likely to register 6-7 per cent growth in the coming months.

As per the data released by the industry department, electricity generation increased to 8.4 per cent in October against 4.4 per cent in the comparable month last year.

Output of finished steel too improved at 6.2 per cent from 2.5 per cent in October 2009.

During April-October period, crude oil sector registered a growth of 10.7 per cent against a contraction of 1.3 per cent in the same period last fiscal.

However, coal output in the first seven months of 2010-11 contracted by 0.1 per cent from a positive growth of 11.4 per cent in April-October 2009-10.

On cumulative basis, electricity generation and cement too slowed to 4.7 per cent and 6.3 per cent, respectively in April-October from 6.1 per cent and 11.3 per cent, in the same period last year.

The data further said petroleum refinery output in the period expanded by 1.4 per cent and finished steel by 4.2 per cent.