Key Details
The July 2026 Index of Core Industries presents a mixed production picture: infrastructure-linked sectors recorded strong growth, but several fuel and agricultural-input industries remained in contraction.
Indicator | July 2026 Position |
|---|---|
Overall core-sector growth | 5.4% |
Strongest-growing sectors | Iron ore 29.5%; cement 13.1%; electricity 9%; coal 7.6% |
Moderate growth | Steel 2.9%; refinery products 2.7% |
Contracting sectors | Fertilisers -8%; crude oil -5.3%; natural gas -3.7% |
April–July cumulative growth | 4.3%, compared with 1.5% in the corresponding period of 2025 |
The July estimate is provisional and may be revised as additional production data become available.
Construction and Power Are Supporting Core-Sector Activity
The Office of the Economic Adviser’s latest estimates show that iron ore, cement and electricity were the principal drivers of core-sector growth in July.
Cement production increased by 13.1%, extending the momentum visible in construction and infrastructure-related activity. Its cumulative growth during April–July reached 9.9%, compared with 8.1% during the corresponding period of the previous year.
Electricity output rose by 9% in July and 9.3% during April–July, reversing the 0.2% contraction recorded in the same four months of 2025. Coal production also returned to year-on-year growth in July after declining in April and May.
Iron ore recorded the fastest July expansion at 29.5%. Its cumulative growth reached 25.2%, partly reflecting comparison with the 5.5% decline registered during April–July 2025.
Steel Growth Has Slowed Despite Stronger Mineral Output
Steel production increased by 2.9% in July, substantially below the double-digit rates seen through much of 2025. Cumulative steel growth moderated to 4.5% during April–July 2026 from 11% a year earlier.
This divergence—rapid growth in iron ore alongside slower steel output—suggests that stronger raw-material production is not translating proportionately into finished steel growth. Demand conditions, inventories, exports and capacity utilisation will determine whether steel production strengthens later in the year.
Domestic Oil and Gas Production Remains Weak
Three sectors contracted in July:
Fertiliser production: -8%;
Crude oil production: -5.3%; and
Natural gas production: -3.7%.
The weakness extends beyond one month. During April–July, crude oil declined by 4.3%, natural gas by 4.4% and refinery products by 2.5%. Coal also remained 3.1% lower over the four-month period despite its July recovery.
Persistent contraction in domestic oil and gas production can increase dependence on imports and expose industry to international prices, geopolitical disruptions and exchange-rate movements. Lower fertiliser output may similarly require monitoring ahead of periods of high agricultural demand.
June Growth Was Revised Up Significantly
The final core-sector index for June was revised from 119.6 to 120.7. Consequently, June’s year-on-year growth rate was revised from the provisional estimate of 5% to 6%.
This revision changes the short-term interpretation of July: the latest 5.4% expansion represents moderation from a stronger June performance, rather than acceleration from the initially reported figure.
What Is the Index of Core Industries (ICI)?
The ICI tracks production across coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, electricity and iron ore. Since these sectors supply energy and materials to the wider economy, the index provides an early indication of industrial momentum.
Policy Relevance
The July data offer three distinct signals for economic policy:
Infrastructure activity remains supportive. Strong cement, electricity and iron-ore production is consistent with continued construction and investment demand.
The recovery is not broad-based. Weak oil, gas, fertiliser and refinery production shows that headline growth is being carried by a limited group of sectors.
Energy security remains a structural constraint. Domestic production weakness in crude oil and natural gas increases the importance of supply diversification, efficiency and alternative energy sources.
Future releases will need to show whether steel and refinery output begin responding to stronger infrastructure activity, and whether July’s coal recovery can offset the cumulative contraction recorded since April.
Follow the Full Release Here: Provisional Estimates of the Index of Core Industries for July 2026