AMN
The outlook for India’s manufacturing sector has improved in the October-December quarter but the cost of doing business remains a cause for concern for the sector while the hiring outlook remains subdued, according to a survey released by FICCI.
The findings of the latest quarterly survey on manufacturing unveiled on Sunday also reflect sustained economic activity in the sector, with existing average capacity utilisation in the range of 65 to 70 per cent.
It also highlighted that manufacturers are looking forward to the upcoming Union Budget to enhance growth and investments in the sector. The Budget will be presented on February 1.
The percentage of respondents reporting higher production in the third quarter of 2021-22 (October-December 2021-22) was around 63 per cent, almost double than the year-round period (around 33 per cent), noted FICCI.
This assessment is also reflective in order books as 61 per cent of the respondents in October-December 2021-22 had a higher number of orders as against July-September 2021-22, the survey found.
High raw material prices, high cost of finance, the uncertainty of demand, shortage of working capital, high logistics cost, low domestic and global demand due to supply chain disruptions are some of the major constraints that are affecting the expansion plans of the respondents, it said.
The survey assessed the performance and sentiments of manufacturers for Q3 (October-December 2021-22) for 12 major sectors namely automotive, capital goods, cement, chemicals, fertilisers and pharmaceuticals, electronics & electricals, medical devices, metal & metal products, paper products, textiles, textiles machinery and miscellaneous.
“Hiring outlook for the manufacturing sector remains subdued as around 75 per cent of the respondents mentioned that they are not likely to hire additional workforce in the next three months,” FICCI stated on the survey.