<p>New Delhi: India’s industrial production growth slipped to a nine-month low of 1.2% in May from 2.7% recorded in the previous month dragged by contraction in electricity and mining output, as per official data released on Monday.</p>.<p>Electricity production in May was 5.8% lower when compared with the same month last year. Mining output declined by 0.1% year-on-year during the month under review.</p>.<p>Manufacturing, which carries the largest weight in the Index of Industrial Production (IIP), posted a slower growth of 2.6% in May compared to 3% recorded in April.</p>.<p>Unseasonal rains and lower-than-normal temperatures negatively impacted electricity and mining production, said Paras Jasrai, Associate Director, India Ratings and Research. </p>.<p>The factory output, measured by the IIP, had recorded a growth of 6.3% in May 2024. The April 2025 IIP growth data has been revised downward to 2.6% from 2.7% reported last month as part of the quick estimate.</p>.<p>Mining output contracted for the second consecutive month. “The early onset of the monsoon doused activity in mining and the demand for electricity, with both these sub-sectors of the IIP reporting a contraction in May 2025, amidst an anemic growth of manufacturing,” said Aditi Nayar, Chief Economist, ICRA.</p>.<p>“Tepid industrial volume growth in the first two months of the quarter doesn't augur well for industrial GVA growth in Q1 FY2026,” Nayar added.</p>.<p>According to Jasrai, the industrial production is likely to remain subdued in June. “The daily power generation fell 2.1% year-on-year in June 2025 (as on June 29), mirroring weak power demand similar to the previous month. This may keep the factory output growth around 1.5% yoy in June,” he said.</p>.<p>The number of sectors having positive growth declined to 13 in May from 19 in January. During the month under review, out of the 23 sub-sectors only 11 recorded higher growth than the overall average.</p>.<p>At the use-based level, the silver lining was capital goods, which posted a growth of 14.1% in May, the highest in 19 months, signaling strong investment push from the government. Infrastructure goods output growth accelerated to 6.3% in May from a six-month low of 4.7% in April.</p>.<p>The government capex (Centre and 22 states) jumped 58.8% year-on-year to Rs 92,000 crore in May.</p>.<p>“The Centre’s capital expenditure gained momentum towards the end of FY25 and has maintained an encouraging trend in the first two months of the current fiscal. This bodes well for the investment scenario in the economy,” said Rajani Sinha, Chief Economist, CareEdge Ratings.</p>.<p>“However, private capex remains subdued, with global economic uncertainty further dampening the investment sentiments. Overall, both demand and investment trends remain crucial monitorables for the industrial performance going forward,” Sinha added.</p>
<p>New Delhi: India’s industrial production growth slipped to a nine-month low of 1.2% in May from 2.7% recorded in the previous month dragged by contraction in electricity and mining output, as per official data released on Monday.</p>.<p>Electricity production in May was 5.8% lower when compared with the same month last year. Mining output declined by 0.1% year-on-year during the month under review.</p>.<p>Manufacturing, which carries the largest weight in the Index of Industrial Production (IIP), posted a slower growth of 2.6% in May compared to 3% recorded in April.</p>.<p>Unseasonal rains and lower-than-normal temperatures negatively impacted electricity and mining production, said Paras Jasrai, Associate Director, India Ratings and Research. </p>.<p>The factory output, measured by the IIP, had recorded a growth of 6.3% in May 2024. The April 2025 IIP growth data has been revised downward to 2.6% from 2.7% reported last month as part of the quick estimate.</p>.<p>Mining output contracted for the second consecutive month. “The early onset of the monsoon doused activity in mining and the demand for electricity, with both these sub-sectors of the IIP reporting a contraction in May 2025, amidst an anemic growth of manufacturing,” said Aditi Nayar, Chief Economist, ICRA.</p>.<p>“Tepid industrial volume growth in the first two months of the quarter doesn't augur well for industrial GVA growth in Q1 FY2026,” Nayar added.</p>.<p>According to Jasrai, the industrial production is likely to remain subdued in June. “The daily power generation fell 2.1% year-on-year in June 2025 (as on June 29), mirroring weak power demand similar to the previous month. This may keep the factory output growth around 1.5% yoy in June,” he said.</p>.<p>The number of sectors having positive growth declined to 13 in May from 19 in January. During the month under review, out of the 23 sub-sectors only 11 recorded higher growth than the overall average.</p>.<p>At the use-based level, the silver lining was capital goods, which posted a growth of 14.1% in May, the highest in 19 months, signaling strong investment push from the government. Infrastructure goods output growth accelerated to 6.3% in May from a six-month low of 4.7% in April.</p>.<p>The government capex (Centre and 22 states) jumped 58.8% year-on-year to Rs 92,000 crore in May.</p>.<p>“The Centre’s capital expenditure gained momentum towards the end of FY25 and has maintained an encouraging trend in the first two months of the current fiscal. This bodes well for the investment scenario in the economy,” said Rajani Sinha, Chief Economist, CareEdge Ratings.</p>.<p>“However, private capex remains subdued, with global economic uncertainty further dampening the investment sentiments. Overall, both demand and investment trends remain crucial monitorables for the industrial performance going forward,” Sinha added.</p>