Capacity utilisation of Lumbini industries falls to 50.60 per cent

By A Staff Reporter,Kathmandu, Nov. 15: The capacity utilisation of industries operating in the Lumbini Province declined significantly in the last fiscal year, according to the Nepal Rastra Bank’s Provincial Economic Activities Study Report for 2024/25, which was made public on Friday.

The study, which covered 28 sample industries, shows that average capacity utilisation fell to 50.60 per cent from 56.36 per cent a year earlier. 

Under industrial production, synthetic fabric output increased the most—by an impressive 170.77 per cent. In contrast, the production of aluminum products, including pressure cookers, saw the sharpest decline by 67.01 per cent.

The credit flow by the Banks and Financial Institutions to the industrial sector has increased by 6.93 per cent during the last fiscal year. 

Of the credit flow to the industrial sector, the highest is in the agriculture, forestry and beverage production related industries at 43.63 per cent and the lowest is in the electricity, gas and water related industries at 1 per cent.

According to data from 28 industries included in the study, 4,988 people, including 641 women and 4,453 men, received direct employment in the review year, while 5,094 people received direct employment in the fiscal year 2023/24.

According to the National Statistics Office, the economic growth rate of Lumbini Province in the fiscal year 2024/25 is estimated to reach 4.70 per cent at consumer prices.

In the fiscal year 2023/24, such a growth rate was revised to 3.94 per cent. The contribution of this province to the country's GDP in the fiscal year 2024/25 is estimated to be 14.23 per cent.

Similarly, looking at the growth rate of GDP by sector, the highest growth rate was noticed in the transportation and storage sector at 9.70 per cent in the fiscal year 2024/25. The lowest growth rate was estimated at 2 per cent for mining and quarrying industries.

Based on industrial classification, the contribution of the agriculture, forestry and fisheries sectors to the provincial economy is estimated to be the highest at 31.02 per cent, while the administrative support services sector is estimated to have the lowest contribution at 0.35 per cent. 

According to data obtained from 10 of the tourist-level hotels selected in the sample during the review year, the number of hotel beds declined by 34.2 per cent while the number of bed sales declined by 45.74 per cent and tourist arrivals by 61.78 per cent.

According to the report, the number of real estate registrations has increased by 42.82 per cent during the review period. However, the revenue from real estate registration has decreased by 5.45 per cent during the review period compared to the previous year.

In mid-July 2025, deposit mobilisation by banks and financial institutions in this province increased by 15.43 per cent and credit flow by 2.92 per cent compared to mid-July 2024.

In the review year, the credit flow to the service sector has decreased by 1.26 per cent. Rupandehi district has the highest share of 53.80 per cent in the total service credit flow and Rukum East has the lowest share of only 0.10 per cent.

The total area covered by food and other crops has decreased by 1.42 per cent and has remained at 768,968 hectares in the fiscal year 2024/25 compared to the previous year.

In the review year, the production of food and other crops in this province has increased by 3.43 per cent and reached 3.38 million tonnes.

The production of milk, meat, eggs and fish has increased by 2.88 per cent, 3.03 per cent, 3.11 per cent and 13.98 per cent respectively during the last fiscal year as compared to the previous year.

During the review period, credit flow to the agricultural sector decreased by 3.46 per cent, with Rupandehi district having the highest share of 43.80 per cent and Rukum East having the lowest share of only 0.40 per cent in the total agricultural credit flow.