The core factory output contracted 9.6 per cent in July, for the fifth consecutive month, because of a decline in the production of steel, cement and refinery products.

The production of eight core sectors had expanded 2.6 per cent in July 2019, data released by the commerce and industry ministry on Monday showed. Barring fertiliser, all seven sectors — coal, crude oil, natural gas, refinery products, steel, cement and electricity — recorded a decline in growth in July.

“The core sector growth is showing a V-shaped recovery since the unlocking of the economy as the contraction has reduced from 38 per cent in April to 9.6 per cent July,” said chief economic adviser Krishnamurthy Subramanian.

“The mild improvement in the pace of contraction in the eight core sectors in July 2020 trailed our expectations, adding to the view that the momentum of the recovery stalled in that month, partly on account of the localised lockdowns,” Aditi Nayar, principal economist at Icra, said.

“The performance of refinery products and cement worsened in July 2020 compared with the previous month, highlighting the unevenness in the sectoral recovery patterns,” she added.

The output of steel declined 16.5 per cent, while that of refinery products was down 13.9 per cent over the year-ago period. Production of cement fell 13.5 per cent and natural gas by 10.2 per cent. Coal output declined 5.7 per cent.

Production of crude oil and electricity fell 4.9 per cent and 2.3 per cent, respectively.

Fertiliser output grew 6.9 per cent during the month under review as against 1.5 per cent in July 2019.

During April-July 2020-21, the sector's output dipped by 20.5 per cent as compared to a growth of 3.2 per cent in the same period previous year.