NEW DELHI: Indian manufacturing accelerated through the second quarter of 2023-24 and is likely to continue for the later quarters of the 2023-24 financial year, despite the slowdown in developed nations, the latest quarterly survey by industry body FICCI revealed.
The industry body’s latest quarterly survey assessed the performance and sentiment of manufacturers for the July-September 2023-24 quarter for ten major sectors — auto and auto components, capital goods and construction equipment, cement, chemical fertilizers and pharmaceuticals, electronics and white goods. , machine tools, metal and metal products, textiles, clothing and technical textiles, paper and miscellaneous.
It sought responses from over 380 manufacturing units from both the large and SME segments with a combined annual turnover of over Rs 4.88 lakh crore.
The existing average capacity utilization in the Indian manufacturing sector is around 74 percent, slightly higher than the 73 percent recorded during the previous quarters.
The future investment outlook also improved compared to the previous quarter, as more than 57 percent of respondents reported plans for investments and expansions in the next six months. This is also a slight improvement over the previous survey.
In terms of major constraints, demand is a limiting factor in realizing the true potential of the manufacturing sector in India, with more than 40 percent of respondents highlighting this as a major constraint.
“Whether it is domestic demand or exports, this remains a major limiting factor. Some other constraints, although not important are high raw material prices, increased cost of finance, logistics and other supply chain disruptions are some of the major constraints that are affecting expansion plans. of the respondents,” finds the FICCI survey.
The table below gives the average capacity utilization for various sub-sectors of production:
On the export front, performance appears to be better than in previous quarters as more than 48 percent of respondents reported higher exports in July-September 2023-24 compared to 33 percent in Q1 2023-24.
“However, further improvement in export demand is required as per the country’s growth aspiration,” FICCI said.
Further, the employment outlook, according to the survey, looks stable with about 38 percent of respondents looking to hire additional workforce in the next three months.
“Most sectors have sufficient manpower engaged in their operations and do not face a shortage of labor in factories. While 82 percent of our respondents mentioned that they have no problems with labor availability, the remaining 18 percent feel that there is still a shortage of skilled labor available in their sector,” FICCI noted.
The industry body’s latest quarterly survey assessed the performance and sentiment of manufacturers for the July-September 2023-24 quarter for ten major sectors — auto and auto components, capital goods and construction equipment, cement, chemical fertilizers and pharmaceuticals, electronics and white goods. , machine tools, metal and metal products, textiles, clothing and technical textiles, paper and miscellaneous.
It sought responses from over 380 manufacturing units from both the large and SME segments with a combined annual turnover of over Rs 4.88 lakh crore.
The existing average capacity utilization in the Indian manufacturing sector is around 74 percent, slightly higher than the 73 percent recorded during the previous quarters.
The future investment outlook also improved compared to the previous quarter, as more than 57 percent of respondents reported plans for investments and expansions in the next six months. This is also a slight improvement over the previous survey.
In terms of major constraints, demand is a limiting factor in realizing the true potential of the manufacturing sector in India, with more than 40 percent of respondents highlighting this as a major constraint.
“Whether it is domestic demand or exports, this remains a major limiting factor. Some other constraints, although not important are high raw material prices, increased cost of finance, logistics and other supply chain disruptions are some of the major constraints that are affecting expansion plans. of the respondents,” finds the FICCI survey.
The table below gives the average capacity utilization for various sub-sectors of production:
On the export front, performance appears to be better than in previous quarters as more than 48 percent of respondents reported higher exports in July-September 2023-24 compared to 33 percent in Q1 2023-24.
“However, further improvement in export demand is required as per the country’s growth aspiration,” FICCI said.
Further, the employment outlook, according to the survey, looks stable with about 38 percent of respondents looking to hire additional workforce in the next three months.
“Most sectors have sufficient manpower engaged in their operations and do not face a shortage of labor in factories. While 82 percent of our respondents mentioned that they have no problems with labor availability, the remaining 18 percent feel that there is still a shortage of skilled labor available in their sector,” FICCI noted.