IANS | 12 Feb, 2024
Apex business chamber FICCI’s quarterly survey on manufacturing
released on Monday reveals a sustained and continued period of growth
for India’s manufacturing sector in the last quarter of financial year
2023-2024.
Compared to the previous quarter, Q3 FY 24, when 73 per cent
respondents had reported higher production levels, in the current Q4 FY
2024, around 87 per cent respondents expect either higher or same level
of production.
This upbeat assessment of India’s manufacturing is
also reflected in higher order books. Around 85 per cent of the
respondents in Q4 FY 2024 are expecting a higher number of orders
compared to the previous quarter. Domestic demand conditions show
optimism in the current Q4 2024.
FICCI’s latest survey assessed
the sentiments of manufacturers for Q4 2023-24 for ten major sectors
such as Automotive & Auto Components, Capital Goods &
Construction Equipment, Chemicals, Fertilizers and Pharmaceuticals,
Electronics & Electricals and FMCG.
Responses have been drawn
from over 400 manufacturing units from both large and SME segments with a
combined annual turnover of over Rs. 3.4 lakh crores.
The survey shows:
The
existing average capacity utilization in manufacturing is around 73 per
cent, which reflects sustained economic activity in the sector, which
is more or less same as reported in previous surveys
The future
investment outlook also looks steady, with over 50 per cent of
respondents indicating plans for investments and expansions in the next
six months
Challenges related to the availability of raw materials
and their escalating prices, uncertainty in global demand, shortage of
skilled labor, market volatility, increased power costs, unutilised
capacities, and high bank interest rates, etc are some of the major
constraints that are affecting expansion plans of the respondents
Exports
About
31 per cent respondents reported higher exports in Q3 2023-24.
Furthermore, over 40 per cent of the respondents expect their exports to
be higher in Q4 2023-24 as compared to the previous year’s similar
quarters.
Hiring
The hiring outlook remains stable as close
to 40 per cent of the respondents are looking at hiring additional
workforce in the next three months.
Interest Rate
Average
interest rate paid by the manufacturers has been reported to be 9.3 per
cent. A little under 45 per cent of the respondents reported that the
increase in repo rates in the last few months has led to a slight
increase in the lending rate by their banks, thereby increasing their
cost of borrowing. Close to 90 per cent of respondents reported
sufficient availability of funds from banks-for working capital or
long-term capital.
