Industrial output growth quickened to an eight-month high of 5% in January on expansion in manufacturing and mining sectors, according to data from the National Statistics Office (NSO) released on Wednesday.

The Index of Industrial Production (IIP) came in at 3.55 in December. January’s increase was led by an expansion in manufacturing activity by 5.5%, and mining and quarrying by 4.4% in the reporting month. These sectors grew at a much slower rate of 3.4% and 2.7% respectively in December. The increase in the two sectors compensated for the slowdown in the electricity sector that expanded at a slower pace of 2.4% against 6.2% in December.

Going by use-based classification, barring primary goods and consumer goods, most sectors experienced slowdown in output growth. Primary goods output growth quickened to 5.5% in January from 3.8% a month ago. Consumer goods sector output increased at a pace of 2.6%, as against December reading, when output had shrunk 2%. This too is on account of consumer non-durables declining at a rate of 0.24% in the reporting month from shrinking 7.5% in December 2024. Output in consumer durables expanded at the slowest pace in three months (7.2%) from 8.3% in December and 14.1% in November 2024. 

“IIP growth at 5% is impressive as it also involves manufacturing growing at 5.5%. For the full year growth can be expected to be between 5-5.5% if these trends are maintained,” wrote Madan Sabnavis Chief Economist of Bank of Baroda, in a research not