Private sector sentiment strengthens as industrial indicators improve across the board
KATHMANDU: After nearly three years of economic slowdown, confidence in Nepal’s private sector is on the rise, bolstered by improvements across all major industrial indicators. A recent survey conducted by the Confederation of Nepalese Industries (CNI) reveals growing optimism among industrialists, particularly those in the manufacturing sector.
According to CNI’s survey of 64 industries, the second quarter of the current fiscal year has shown encouraging signs of recovery. Key metrics such as operational capacity, revenue growth, employment, and market demand have all shown noticeable improvement.
Industrial Operations Regain Momentum
The average operational capacity of industries has reached 62.35%, marking a 2% increase compared to the first quarter. The manufacturing sector, in particular, has demonstrated a significant upturn, with industries operating at 68.71% capacity—up from just 50.62% in the previous quarter.
This rise in operational levels has also contributed to a boost in trade and earnings. Overall, industrial income has increased by 12.33%, while revenue in the manufacturing sector alone grew by 10.99%, compared to a modest 6.8% rise in the previous quarter.
Demand and Employment on the Rise
The survey indicates that market demand for goods and services has increased by 19.67%, a substantial recovery given that demand had previously shrunk by up to 50%. This surge has sparked renewed enthusiasm within the private sector, suggesting that consumer confidence may also be rebounding.
Employment figures also reflect this positive trend. The surveyed industries currently employ 18,496 workers, with 320 new hires made in the second quarter of this fiscal year—an indication that businesses are beginning to expand their workforce in response to improved conditions.
Industrial Leaders Express Optimism
With the survey highlighting improvements across nearly all indicators, CNI officials expressed satisfaction, noting that the market appears to be regaining its rhythm. The findings were presented during a special briefing at the CNI Secretariat, where stakeholders shared a hopeful outlook regarding the broader economic recovery.
According to the survey, 62.5% of industries have plans to expand investment. Interestingly, a higher proportion of planned investment is targeted toward the service sector compared to manufacturing, suggesting a diversification of growth strategies among private enterprises.
As economic activity picks up, industry leaders are optimistic that the Nepali economy is poised for a gradual but steady bounce-back.
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