Manufacturing growth set to continue: FICCI

Indian manufacturing has accelerated in the second quarter of 2023-24 and is likely to continue for the subsequent quarters of the financial year 2023-24 as well, said industry body Ficci’s latest survey.

Notwithstanding the slowdown in developed nations, the manufacturing sector’s momentum of growth has accelerated. Around 57 per cent of the manufacturing companies which responded to a survey by Ficci had reported higher production levels. This went up to 79 per cent in the September quarter.

The survey assessed the performance of ten major sectors namely automotive and auto components, capital goods and construction equipment, cement, chemicals, fertilizers and pharmaceuticals, electronics and white goods, machine tools, metal and metal products, textiles, apparels and technical textiles, paper, and miscellaneous.

Responses have been drawn from over 380 manufacturing units from both the large and SME segments with a combined annual turnover of over Rs. 4.88 lakh crore.

Electronics and white goods, cement, automotive and machine tools have displayed strong growth and others reported moderate growth. Further, 80 per cent of the respondents in the September quarter had a higher number of orders and demand conditions and continued to be optimistic.

The existing average capacity utilisation in manufacturing is around 74 per cent, slightly higher than 73 per cent capacity utilization reported for previous quarters. Paper and paper products reported 90 per cent capacity utilization, while cement reported 80 per cent.

Further, 85 per cent of the respondents had either more or the same level of inventory levels. Production cost has increased for 58 per cent of respondents as compared to 77 per cent of respondents for the previous quarter. The future investment outlook has also improved as over 57 per cent of respondents reported plans for investments and expansions in the coming six months, higher than the previous survey. However, only 38 per cent of the respondents are looking at hiring additional workforce in the next three months.

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