Manufacturing Sector Sees 1.34% Salary Growth Despite Slowdown

The Salary and Wage Index (SWI) for FY 2024/25 indicates that Nepal’s manufacturing sector posted a modest 1.34% salary growth, with the index rising to 101.81 in July 2025 from 100.46 in July 2024. Although wages increased, the growth rate lagged behind the national average of 2.63%, signaling a slowdown in one of the country’s key industrial sectors.

This modest rise comes after the sector had shown strong recovery momentum between FY 2022/23 and FY 2023/24, when wages grew by 9.03%, reflecting post-pandemic industrial revival. However, in FY 2024/25, the sector faced sluggish demand, rising import competition, and higher production costs, which limited employers’ ability to adjust wages.

Compared with other industries, manufacturing’s wage growth was weaker than agriculture (+4.78%), information and communication (+4.35%), and financial services (+3.73%), highlighting that service-driven sectors are outpacing traditional industries. This suggests that while manufacturing remains a vital employer, it is under pressure from low productivity, limited modernization, and supply chain challenges.

For workers, the wage increase offers limited relief against living costs, especially in urban manufacturing hubs. For employers, it reflects cautious cost management, where wage hikes are kept minimal to maintain competitiveness. Unless productivity-enhancing investments are made, Nepal’s manufacturing wages may continue to trail behind faster-growing service sectors.