Manufacturing boosts industrial output growth to 5% in Jan

Output of consumer non-durables products in January was lower when compared with the same month last year. However, the contraction eased to 0.2% in January from 7.5% in the previous month.

India’s Industrial output growth rose to 5 per cent in January 2025 from 3.2 per cent in December 2024, led by a robust expansion in manufacturing, as per data released by the National Statistics Office on Wednesday.

Factory output, measured in terms of the Index of Industrial Production (IIP), had posted a growth of 4.2 per cent in January 2024. The January 2025 data reflects improvement in factory output expansion on a month-on-month as well as year-on-year basis.

Manufacturing, which has 77.66 per cent weight in the IIP, recorded 5.5 per cent expansion in January against 3.6 per cent growth recorded in the same month last year. In December 2024, manufacturing output growth stood at 3.4 per cent. Cumulative growth in manufacturing output in the April-January period of the current financial year stood at 4.2 per cent, which is in line with the overall expansion in the IIP.

The uptick was led by primary goods and consumer durables. Growth in primary goods output accelerated to 5.5 per cent in January from 3.8 per cent in December. It was driven by mining and petroleum products. Primary goods witnessed a growth of 5.5 per cent while intermediate goods rose by 5.23 per cent.

Output of consumer non-durables products in January was lower when compared with the same month last year. However, the contraction eased to 0.2 per cent in January from 7.5 per cent in the previous month.

“The rise in consumer durables signals improving consumer confidence and economic resilience,” Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India, said in a note.

Fast-moving consumer goods such as food products saw higher growth, likely driven by easing food inflation and improving rural demand, said Dipti Deshpande, Principal Economist, Crisil.

Output growth of capital goods moderated to 7.8 per cent in January from 10.4% in the previous month while infrastructure and construction goods output growth declined from 7.4 per cent in December 2024 to 7 per cent in January 2025. According to Deshpande, this was likely due to moderation in government capital spending growth.

“IIP growth improved to a higher than expected 5 per cent in January 2025, led by manufacturing and mining. The use-based data is less enthusing, with a sequential year-on-year pickup seen in only two segments (consumer non-durables and primary goods) amidst a slowdown in the other four,” said Aditi Nayar, Chief Economist, ICRA.