Manufacturing unit output progress picked up tempo marginally to rise sequentially to three per cent in March from a six-month low of two.7 per cent in February, even because it stayed decrease than 5.5 per cent progress seen within the corresponding interval a 12 months in the past, primarily because of weak mining progress, knowledge launched by Nationwide Statistics Workplace (NSO) on Monday confirmed. For the total monetary 12 months 2024-25, manufacturing facility output, as measured by the Index of Industrial Manufacturing (IIP) grew by 4 per cent as in opposition to 5.9 per cent within the earlier 12 months.
Economists stated development of the IIP knowledge launch date may very well be one of many causes for lower-than-expected print in March. The IIP knowledge for March was the primary launch after the NSO introduced the change in timing to twenty eighth of each month as a substitute of twelfth earlier. The time lag for the discharge of the commercial output knowledge has been diminished to twenty-eight days from 42 days at current.
“The IIP progress for March 2025 got here in barely decrease than our forecast of three.3 per cent. It’s potential that the decrease response fee related to the preponing of the information launch has dampened the estimated progress fee, which can subsequently endure a comparatively bigger revision as in comparison with that seen previously,” Aditi Nayar, chief economist, ICRA stated. She additionally stated that whereas there’s some proof in addition to commentary round frontloading in exports to the US, it must be seen whether or not that is pushed by redirection away from different geographies or a bump up in output within the ongoing month.
As per the NSO, the fast estimate for IIP for a selected month will endure revision solely as soon as, within the subsequent month as the ultimate estimate. Now, there will likely be solely two estimates (fast estimate and closing estimate) of a specific month as a substitute of the sooner apply of releasing three estimates (fast estimates adopted by a primary revised estimate and second revised (closing) estimate).
Manufacturing output, which accounts for 77.6 per cent of the burden of the IIP, picked up tempo barely to develop 3 per cent in March from 2.8 per cent within the earlier month, even because it was decrease than 5.9 per cent within the year-ago interval. “In sequential phrases, the advance in progress of electrical energy and gentle uptick in that of producing was offset to a big extent by the dip within the progress of mining,” Nayar stated.
Electrical energy output grew by 6.3 per cent in March from 3.6 per cent in February, but it surely was decrease than 8.6 per cent within the year-ago interval. Mining output progress slumped to 0.4 per cent in March from 1.6 per cent in February and 1.3 per cent in March 2024, the information confirmed.
Infrastructure industries carried out properly with 17-month excessive progress of 8.8 per cent in March over 7.4 per cent within the year-ago interval. “…this may be attributed loads to the frontend spending by the federal government on initiatives,” Madan Sabnavis, chief economist, Financial institution of Baroda stated. The infrastructure items output could have additionally gained from the year-end rush to fulfill capex targets each by state and union governments, Paras Jasrai, senior financial analyst, India Rankings and Analysis stated.
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Output of capital items — an indicator of funding — additionally moderated 2.4 per cent in March from 8.2 per cent within the earlier month and seven per cent within the year-ago interval. “Capital items progress was subdued at 2.4 per cent with differential efficiency throughout equipment and motor automobiles being good whereas the class of ‘different transport tools’ registering detrimental progress,” Sabnavis stated.
Client durables output — an indicator of consumption demand — surged to six.6 per cent in March from a 15-month low of three.7 per cent in February regardless of a excessive base of 9.5 per cent progress within the year-ago interval, a sign of the excessive client durables output amid the onset of the summer season season and extra warmth waves.
Client non-durables, which displays fast-moving client items, continued to be within the detrimental territory for the second straight month at (-)4.7 per cent in March as in opposition to (-)2.1 per cent in February and 5.2 per cent within the year-ago interval. “The buyer non-durables are nonetheless in contractionary part, with the output declining sharply by 4.7 per cent in March 2025. The constructive spillover results of great ebbing of excessive meals inflation together with the financial easing in February and April 2025, can be felt with a lag in FY26,” Jasrai stated.
Going forward, economists stated a pickup in funding and consumption is prone to assist industrial progress, whereas tariff dangers from the US could influence exports. “Monitoring consumption developments stays essential, given the continued unevenness within the home demand panorama. Wanting forward, it will likely be essential to observe international commerce dynamics and geopolitical dangers,” Rajani Sinha, chief economist, CareEdge Rankings, stated.