Industrial output growth dips to 2.9% in February from 5% in January

The commercial manufacturing, as measured by the Index of Industrial Manufacturing (IIP), fell to 2.9% in February 2025 from 5% in January, in accordance to knowledge launched by the Ministry of Statistics and Programme Implementation (MoSPI) on Friday. 

For February 2025, the growth charges of the mining, manufacturing, and electrical energy sectors had been reported at 1.6%, 2.9%, and three.6%, respectively.

The bottom growth charge in latest occasions was noticed in August of the earlier yr, with a flat growth charge of zero p.c.

Current knowledge launched in March indicated a decline in growth for the core sector or infrastructure industries, dropping to 2.9% in February from 5.1% in the earlier month, marking the bottom growth charge in 5 months.

Within the upcoming fiscal yr FY25, it’s anticipated that the manufacturing sector, the important thing contributor to India’s industrial output, will expertise a growth charge of 4.3 p.c. This can be a vital lower from its earlier growth charge of 12.3 p.c in the final fiscal yr.

This decline in efficiency may be attributed to the slowdown in authorities capital expenditure, which solely achieved 80 p.c of the annual goal in the eleven months of the fiscal yr.

“As anticipated, the bissextile year base pulled down the YoY growth of the IIP to 2.9% in February 2025 from 5.2% in January 2025, largely in line with ICRA’s forecast for the month (+3.0%). The deceleration was broad-based, with all of the use-based classes, in addition to two of the three sectors barring electrical energy, witnessing a slower growth in February 2025 vis-à-vis the earlier month,” stated Aditi Nayar, Chief Economist, Head – Analysis & Outreach, ICRA Ltd.

She added: “Following the bottom impact induced slowdown in February 2025, the YoY efficiency of many of the accessible excessive frequency indicators improved in March 2025, together with electrical energy technology and the mobility and transport-related indicators, equivalent to GST e-way invoice technology, port cargo site visitors, diesel consumption, petrol consumption, and automobile registrations. Whereas metal consumption declined in March 2025, this was dampened by a excessive base. Whereas the growth efficiency of mining is anticipated to deteriorate in March 2025 relative to February 2025, that is seemingly to be offset by an uptick in electrical energy technology, amid regular manufacturing growth. ICRA expects the IIP growth to print at ~3.0% in March 2025, comparable to the degrees seen in February 2025.”

“The IIP growth got here in at 2.9% YoY in Feb 2025, with a noticeable deceleration from 5.2% in Jan. That is primarily due to a cloth slowing in mining and manufacturing and is partly made worse by the bottom impact. The manufacturing sector, which holds the lion’s share of the IIP weight, expanded by 2.9%, its lowest degree since final August,  displaying subdued rural and semi-urban consumption tendencies. From a use-based perspective, capital items posted a powerful 8.2% growth, hinting at a gradual revival in funding exercise, whereas infrastructure and development items maintained a robust 6.6% growth, largely aided by government-led capex. That stated, client non-durables registered a contraction for the third consecutive month due to persistent demand-side fragility, particularly in staples,” Sankar Chakraborti, MD & CEO, Acuité Rankings & Analysis Restricted.