February industrial production adds more steam amid a recovering economy

The Index of Industrial Production (IIP) added more heft in February 2025, reflecting gradual recovery in the industrial activities in the country after the economic normalcy has been re-established after years of wobbling conditions.

According to the latest data, the IIP for February was read at 93.5 index points, up 6.3 percent from the same period in 2024.

However, it was still way off from the three-digit levels the index reached in the pre-crisis period in 2021.

The industrial production offers a close barometer of the strength of the hardcore industrial activities in the country.

A more often used gauge, the manufacturing sector Purchasing Managers’ Index (PMI) for March - as PMI is a more leading indicator than the industrial production - rose sharply to 63.9 index points, signaling accelerated expansion in activities, particularly on food and beverage and textile and wearing apparel manufacturing sectors.

In the IIP for February, both of these sectors showed expansion, with the food and beverage expanding at a faster pace of 12.2 percent to 97.4 percent. The wearing apparel sector added 1.7 percent to 86.6 percent.

How the wearing apparel sector would be affected by the recently imposed tariffs by the US at a lower rate of 10.0 percent from an earlier 44.0 percent is yet to be seen.

Out of the roughly US$ 3.0 billion in merchandise exports to the United States from Sri Lanka, about 65 percent are wearing apparel.

The authorities who were in Washington recently are hopeful of striking a deal which will ameliorate any bad impact on the country’s exports to the US.

Meanwhile, in February, among the other key industrial sectors that recorded an expansion were beverages which rose by 0.4 percent to 111.7 index points.

Other non-metallic mineral products rose the most among the key sectors by 26.1 percent to 113.5 index points.

Meanwhile, coke and refined petroleum products sector activity fell by 12.2 percent, rubber and plastic products slid by 4.7 percent while the chemical and chemical products came down by 14.4 percent from the same month in 2024.