High input cost to hit growth

Manufacturing sector strained

High input cost to hit growth

An in-depth survey on performance of a range of manufacturing sectors conducted by CII reveals that high inflation and input cost are inhibiting manufacturing sector growth.

In a subtle manner, the survey has cautioned that the ongoing growth of the economy may be affected if the expansion of key manufacturing sector comes under strain in the absence of remedial measures to remove emerging factors inhibiting growth momentum.  

“Soaring inflation, rising input cost and slow growth in capacity addition are some of the reasons that are inhibiting growth in specific sectors,” CII Director General Chandrajit Banerjee said.

The Survey lists factors inhibiting growth momentum of manufacturing sector The CII survey shows that out of 35 sectors reporting for sales, 18 sectors recorded excellent growth, 5 sectors reported high growth, 10 sectors reported moderate growth and 2 registered negative growth. The Survey while tracking export performance of manufacturing industries reveals that out of 24 sectors reporting exports, 14 were in the excellent growth category, two had shown high growth, four sectors were in the moderate growth category and three segments reported negative growth.

There are sectors, which have recovered sharply and grow at over 20 per cent while some have remained in the moderate growth range of 0-10 per cent during April-September, 2010-11 over the same period last year, it said. Out of 127 sectors covered by the survey, 43 sectors including natural gas and vehicle industry have registered an excellent growth rate of more than 20 per cent in April- September, 2010 compared to 14 sectors in the same period last year.

Sectors registering high growth rate, however, have decreased from 30 last year to 22 sectors in the first half of the fiscal. Sectors reporting high growth rate include, crude oil, power cables and consumer non-durables like cigarettes and home and personal care.

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