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IIP growth at a nine-month low in May’25

Mainly led by a slowdown in the mining and electricity sectors

* Industrial output grew at a nine-month low of 1.2% YoY in May’25 (vs. 2.6%/6.3% in Apr’25/May’24). The deceleration in industrial output was mainly led by a contraction in the mining and electricity sectors (worst in 59 months). Mining output shrank 0.1% in May’25 while electricity output contracted 5.8%. (Exhibits 1 and 2).

* At the same time, manufacturing output grew at a steady pace of 2.6% in May’25 (the lowest growth in three months) but still remained weak. (Exhibit 1). In Apr-May’25, IIP growth averaged 1.9% YoY, compared to 5.7% in the corresponding period last year. The details of the manufacturing sector suggest that 78.4% of the sub-sectors grew at a slower rate compared to May’24 (vs. 59.2% in Apr’25), 57% of the items grew less than 5% (vs. 50% in Apr’25), and 28% of the items posted a contraction (vs. 39% in Apr’25). (Exhibit 3).

* Among manufacturing segments, 13 of 23 industry groups registered positive growth. The manufacture of machinery and equipment grew by 11.8%, basic metals by 6.4%, and other non-metallic mineral products by 6.9%. Item groups such as cement, glassware, and certain types of steel products contributed to growth in the sector.

* According to the use-based classification, capital goods output increased by 14.1% in May’25, infrastructure and construction goods by 6.3%, and intermediate goods by 3.5% Primary goods dipped by 1.9%. Output of consumer durables and consumer non-durables declined by 0.7% and 2.4%, respectively. (Exhibit 4).

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