Manufacturing pushes industrial output growth to 4-month high of 3.5 pc in July

New Delhi, Aug 28 (PTI) India's industrial production growth accelerated to a 4-month high of 3.5 per cent in July this year due to good performance of manufacturing sector, according to official data released on Thursday.

The country's industrial output earlier recorded this level of growth at 3.9 per cent in March 2025.

The factory output, measured in terms of the Index of Industrial Production (IIP), had expanded by five per cent in July 2024.

The National Statistics Office (NSO) in its revised figure for June kept the pace of industrial production growth unchanged at 1.5 per cent as against the provisional estimates released last month.

The latest NSO data showed that the manufacturing sector's output growth rose to 5.4 per cent in July 2025 from 4.7 per cent in the year-ago month.

Mining production contracted by 7.2 per cent against a growth of 3.8 per cent recorded a year ago.

Power production rose by a meagre 0.6 per cent in July 2025 against 7.9 per cent in the year-ago period.

During the April-July period of FY26, the country's total industrial production grew by 2.3 per cent compared to 5.4 per cent a year ago.

Commenting on the data Aditi Nayar, Chief Economist, Head - Research & Outreach, ICRA, said, "Encouragingly, growth in manufacturing output accelerated to a six-month high of 5.4 per cent in July 2025 from 3.7 per cent in June 2025, aided by construction inputs and consumer durables." The previous high in the manufacturing sector was recorded in January 2025 at 5.8 per cent.

She stated that the IIP growth accelerated appreciably to a four-month high of 3.5 per cent in July 2025 from 1.5 per cent in June 2025, led by a broad-based improvement across all the sectors.

Nevertheless, the performance of the mining and electricity sectors remained weak, even as the effect of heavy rains eased somewhat in that month, weighing on the overall IIP growth, she pointed out.

Nayar said looking ahead, the improved transmission of monetary easing and the recent announcement of the forthcoming GST rationalisation may help shore up urban consumption sentiments, although discretionary consumption may see some deferment until lower tax rates are brought in.

"This postponement of discretionary purchases along with the disruptive monsoon rainfall in some regions over the last few weeks could contain the IIP growth sub-3 per cent in August 2025," she said.

Within the manufacturing sector, 14 out of 23 industry groups have recorded a positive year-on-year growth in July 2025.

As per use-based classification, the capital goods segment growth decelerated to 5 per cent in July 2025 from 11.7 per cent in the year-ago period.

Consumer durables (or white goods production) growth slowed to 7.7 per cent during the reporting month against a growth of 8.2 per cent in July 2024.

In July 2025, consumer non-durables output recorded a meagre growth of 0.5 per cent as against a contraction of 4.2 per cent a year ago.

Infrastructure/construction reported a growth of 11.9 per cent in July 2025, up from a 5.5 per cent expansion in the year-ago period.

The data also showed that the output of primary goods contracted by 1.7 per cent in July 2025 against 5.9 per cent growth a year earlier.

The expansion in the intermediate goods segment was 5.8 per cent in the month under review against 7 per cent a year ago. PTI KKS HVA