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IIP growth at a six-month low in Feb’25

Mainly led by a slowdown in the manufacturing sector

* Industrial output grew at a six-month low of 2.9% YoY in Feb’25 (vs. 5.2%/5.6% in Jan’25/Feb’24). The deceleration in industrial output was mainly led by a 15-month low growth in the manufacturing sector and a four-month low growth in the mining sector. At the same time, electricity output witnessed some improvement in Feb’25, although it remained weak. (Exhibit 1). The number was lower than the market consensus of 3.6% and our forecast of 4.0%. In Apr-Feb’25, IIP growth averaged 4.1% YoY, compared to 6.0% in the corresponding period last year.

* The manufacturing sector output grew 2.9% YoY in Feb’25 (lowest growth rate in 15 months) vs. 5.8% in Jan’25 and 4.9% in Feb’24. The details of the manufacturing sector suggest that only 80.8% of the sub-sectors grew at a slower rate compared to Feb’24 (vs. 47.7% in Jan’25), 60.2% of the items grew less than 5% (vs. 42.7% in Jan’25), and 24.9% of the items posted a contraction (vs. 9.1% in Jan’25).

* According to the use-based classification, growth in the output of consumer goods witnessed a sharp deceleration in Feb’25 (0.3% in Feb’25 vs. 2.6% in Jan’25), led by a higher contraction in consumer non-durables output (-2.1% in Feb’25 vs. -0.3% in Jan’25) and 15-month slowest growth in the output of consumer durables. At the same time, capital goods output grew at a four-month low rate of 8.2% in Feb’25 (vs. 10.3% in Jan’25), though it remained robust. Notably, infrastructure and construction goods grew 6.6% in Jan’25 vs 7.0%/8.3% in Jan’25/Feb’24.

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