Industrial Capacity Utilisation Declines across Four Provinces

Industrial capacity utilisation declined in Bagmati, Gandaki, Madhesh and Lumbini provinces in FY 2024/25 compared to FY 2023/24, according to the Nepal Rastra Bank’s annual report on Provincial Economic Activity 2024/25.

The drop comes at a time when industrialists have been expressing concerns over reduced demand in the domestic market.

Bagmati Province

Industries in Bagmati Province operated at an average capacity utilisation of 38.7 percent in FY 2024/25, down from 44.3 percent in FY 2023/24. Among the sampled industries, instant noodle manufacturers posted the highest utilisation, while garment manufacturers performed the lowest.

Gandaki Province

Gandaki Province—dominated by small and medium enterprises—also saw a decline. Capacity utilisation among 14 sampled industries fell marginally by 0.03 percentage points to 39.19 percent in FY 2024/25. Production increased in instant noodles, capsule medicines, beer, cigarettes, processed milk, dry syrup (medicine) and mustard oil during the review period. However, output of bricks, ointments, tablets, liquid medicines, chocolates, biscuits and cement declined.

Madhesh Province

In Madhesh Province, capacity utilisation among sampled industries averaged 46.17 percent in FY 2024/25, down from 49.76 percent a year earlier. Beverage manufacturers recorded the highest utilisation at 95.52 percent, while vegetable ghee industries posted the lowest.

Lumbini Province

In Lumbini Province, the average capacity utilisation of 28 sampled industries stood at 50.60 percent in FY 2024/25, compared to 56.36 percent in FY 2023/24. Rosin manufacturers reported the highest utilisation at 88.69 percent, while dry syrup producers recorded the lowest at 8.64 percent.