Manufacturing unit output development slowed to a six-month low of two.9 per cent in February primarily on account of a excessive base impact and deceleration throughout sectors together with manufacturing, mining and client items, knowledge launched by Nationwide Statistics Workplace (NSO) on Friday confirmed. Manufacturing unit output, as measured by the Index of Industrial Manufacturing (IIP), had grown 5.2 per cent in January this 12 months and 5.6 per cent in February 2024.
Manufacturing output, which accounts for 77.6 per cent of the burden of the IIP, additionally slumped to a six-month low of two.9 per cent in February from 5.8 per cent in January and 4.9 per cent within the year-ago interval. Mining output grew by 1.6 per cent in opposition to 4.4 per cent in January and eight.1 per cent in February 2024, it confirmed.
Electrical energy was the one sector to register a pickup, with its output rising by 3.6 per cent in February, larger from 2.4 per cent within the previous month. It was, nonetheless, decrease than 7.6 per cent within the year-ago interval. “The moderation in mining and manufacturing output greater than offset the advance in electrical energy output, weighing on the general development quantity,” Rajani Sinha, chief economist, CareEdge Rankings mentioned.
Progress in output of capital items — an indicator of funding — was a constructive signal, regardless of moderating to eight.2 per cent from 10.3 per cent in January. The expansion was, nonetheless, larger than 1.7 per cent development in February 2024. Infrastructure or development items output additionally grew firmly at 6.6 per cent in February even because it was barely decrease than 7.4 per cent within the earlier month and eight.3 per cent within the year-ago interval.
“Worryingly, the output development of all of the sub-sectors on the use-based stage declined in February 2025 in comparison with the earlier month, after a spot of 5 months. This means the muted and unstable nature of business output development…the silver lining was the respectable development in capital and infrastructure items at 8.2 per cent YoY and 6.6 per cent YoY, respectively, in February. This means sustained-but-moderated development in funding demand and development sector output,” Paras Jasrai, senior financial analyst at India Rankings, mentioned.
Consumption development faltered, with each client durables and non-durables registering a sequential deceleration. Shopper durables output — an indicator of consumption demand — slowed to three.8 per cent in February as in opposition to 7.2 per cent development within the earlier month and 12.6 per cent within the year-ago interval. Shopper non-durable items output, which displays fast-moving client items, continued to be within the unfavourable territory for the third consecutive month at (-)2.1 per cent in February in contrast with (-)0.3 per cent development within the earlier month and (-)3.2 per cent within the year-ago interval.
Specialists mentioned this displays demand-side fragility and therefore, requires shut monitoring. “Monitoring consumption tendencies stays essential as a result of ongoing unevenness within the home demand panorama. Whereas rural demand has been bettering, the lagging city demand continues to be a explanation for concern,” Sinha mentioned.
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Although consumption demand appears to have weakened, economists mentioned the current price lower by the Reserve Financial institution of India and the easing meals costs will assist in a pickup going forward. “There may be gentle on the tunnel with the substantial easing of meals inflation within the current time interval and financial easing in February and April 2025, the impact of which might be felt with a lag in FY26…with the onset of the summer season, the ability demand has seen a pickup because it was up 6.6 per cent YoY in March 2025, at a nine-month excessive. As well as, there was a sign of pickup in authorities spending in March 2025 with the standard rush to satisfy capex targets each by state and union governments,” Jasrai mentioned. India Rankings expects industrial output development to be round 4 per cent in March.
Sectorally, as per the IIP knowledge, 14 out of the 23 sectors in manufacturing registered development in February, with laptop, digital and optical merchandise (10.6 per cent), electrical gear (9.3 per cent), and motor automobiles, trailers and semi-trailers among the many larger rising sectors. Manufacturing of leather-based and associated merchandise((-)9.4 per cent), paper and paper merchandise ((-)9.1 per cent), and printing and copy of recorded media ((-)8.6 per cent) have been among the many vital non-performers.
On a cumulative foundation, industrial output development was at 4.1 per cent throughout April-February as in opposition to 6 per cent within the year-ago interval. “The electrical energy sector stays a constant outlier with 5 per cent development, and we’ll proceed to see it rising for the subsequent few months because the demand for electrical energy will increase as a result of onset of summer season. Whereas we’re seeing the commercial sector put up uneven numbers, this volatility flags the danger of plateauing momentum. The divergence between funding and consumption wants shut monitoring within the run-up to FY26,” Sankar Chakraborti, MD & CEO, Acuité Rankings & Analysis Ltd mentioned.