Industrial capacity utilisation falls

By A Staff Reporter,Kathmandu, Jan. 5: The capacity utilisation of industries across the country declined in the last fiscal year 2024/25.

According to the Economic Activity Study (Consolidated) annual report issued by Nepal Rastra Bank, the average capacity utilisation of industries decreased by 3.8 percentage points in the last fiscal year compared to the previous fiscal year 2023/24.

The average capacity utilisation of the industries included in the study during the review period stood at 44.5 per cent. In the fiscal year 2023/24, the average capacity utilisation was 48.3 per cent.

Among the industries covered in the review year, the tyre and tube industry recorded the highest capacity utilisation at 90.7 per cent, while the vegetable ghee-producing industry recorded the lowest at 1.10 per cent.

Among the industries included by the study, the capacity utilisation of industries producing vegetable ghee, soybean oil, biscuits, noodles, beer, cigarettes, synthetic fabrics, other under textiles, raw leather, plywood, tablet medicines, capsules, ointments, dry syrups, liquids, soaps, plastic goods, iron rods and sheets, steel products, GI pipes and transformers has increased.

However, the capacity utilisation of industries producing mustard oil, processed milk, rice, wheat flour, animal feed, sugar, chocolate, processed tea, alcohol, soft drinks, yarn, pashmina, garments, jute goods, sawn wood, paper, rosin, paint, polythene pipes, bricks, cement, concrete, GI wires, household metal goods, aluminum products, electrical wires and cables, tyres and slippers, and electricity has decreased.

During the review year, the average capacity utilisation of industries in Madhes and Karnali provinces increased, while it decreased in Koshi, Bagmati, Gandaki, Lumbini, and Sudurpaschim provinces.

According to the report, the credit provided by banks and financial institutions to the industrial sector increased by 11.95 per cent as of mid-July 2025 to reach Rs. 1,699.49 billion. Such credit had increased by 9.35 per cent in the same period last year.

The share of credit provided to the industrial sector out of the total credit is 30.42 per cent. 

Among industrial credit, the highest credit flowed to the non-food manufacturing industry at 35.27 per cent, followed by electricity, gas and water industries at 26.26 per cent, agriculture, forestry and beverage industries at 21.85 per cent, construction industries at 11.70 per cent, metal products, machinery and electronics industries at 4.23 per cent, and mining industries at 0.69 per cent.

Among industrial loans, Bagmati Province has the highest loan investment of Rs. 1,280.97 billion. After that, Koshi Province (Rs. 160.64 billion) and Lumbini Province (Rs. 141.02 billion) are in second and third place respectively.