Industrial Growth Slows to 2.9% in February, Hits Six-Month Low While there are still areas of resilience, especially in capital and infrastructure-linked goods, the broader industrial landscape remains mixed.
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India's industrial output lost momentum in February, clocking a growth of just 2.9 per cent, the slowest pace in six months. The slowdown reflects a mix of a high base effect, subdued consumer demand, and weaker performance in key sectors like mining and manufacturing. In comparison, February 2024 had seen industrial production expand by 5.6 per cent, partly buoyed by the extra day from the leap year. Even in January this year, output had grown by 5.2 per cent, making the latest numbers a notable pullback.
Data released by the Statistics Ministry points to sluggish growth across major segments. Mining grew only 1.6 per cent, while manufacturing, which accounts for the bulk of industrial activity, edged up 2.9 per cent. Electricity generation fared slightly better, growing at 3.6 per cent, but it too showed signs of strain compared to previous months.
The use-based classification presents a more nuanced picture. Capital goods and infrastructure-related goods stood out with relatively strong growth of 8.3 per cent and 6.6 per cent respectively, suggesting ongoing investment activity in certain pockets. However, growth in primary goods (2.8 per cent) and intermediate goods (1.5 per cent) was significantly lower, indicating broader industrial sluggishness.
Consumer demand continues to show an uneven trend. Output of consumer durables rose by 3.8 per cent in February, possibly helped by post-winter seasonal purchases and stock clearances. On the other hand, production of consumer non-durable goods shrank by 2.1 per cent, marking the third consecutive month of contraction in that segment. This persistent decline underscores concerns about rural demand and household consumption pressures.
Meanwhile, e-way bill generation, a proxy for goods movement and broader economic activity, surged to a record 124.5 million in March. The spike is largely attributed to businesses pushing out inventories ahead of the financial year-end. While this reflects logistical activity, it also highlights the contrast between end-of-year stock clearance and the muted underlying production trend.
