Key Highlights
- Overall core sector growth decelerated to 2.9% in February 2025, the weakest pace in the last five months.
- Only cement and fertilizers recorded year‑on‑year gains, rising 10.5% and 10.2% respectively.
- Steel output improved to 5.6% and electricity generation to 2.8%, while coal, crude oil and natural gas posted declines.
- Industrial Production Index is likely to be tempered after a robust 5% rise in January 2025.
Detailed Insights
The February 2025 core sector report shows a marked slowdown, with growth falling from 5.1% in January to 2.9%. Analysts attribute the dip largely to a high‑base effect created by the leap‑year comparison and weaker performance across five of the eight surveyed industries. Cement (10.5%) and fertilizers (10.2%) were the sole segments delivering annual expansion, suggesting selective resilience in construction‑related inputs.
Steel production climbed 5.6%, modestly better than the 4.7% recorded a month earlier, indicating continued demand from infrastructure projects. Electricity generation edged up 2.8%, up from 2.4% in January, while coal output slipped to 1.7%, its slowest level in half a year. Energy‑intensive commodities such as crude oil and natural gas contracted sharply, falling 5.2% and 6% respectively, reflecting global price pressures and domestic supply constraints.
Refinery throughput expanded by a tepid 0.8%, the weakest growth in six months, underscoring challenges in the downstream sector. The Manufacturing Purchasing Managers' Index (PMI) softened to 56.3 in February from 57.7 in January, signalling a gradual easing of factory activity despite remaining in expansion territory.
Key Concepts
- Core Sector: A composite indicator that aggregates output from eight heavy‑industry categories, serving as a proxy for overall industrial health.
- High‑Base Effect: A statistical phenomenon where growth rates appear subdued because the comparison period experienced unusually strong performance.
- Industrial Production Index (IPI): A monthly gauge that tracks changes in the volume of output across manufacturing, mining, and utilities.
- Purchasing Managers' Index (PMI): A diffusion index derived from surveys of purchasing executives; values above 50 denote expansion.