'Manufacturing to remain subdued in Q4'

Amid slowing industrial output, industry chamber FICCI has warned of further sluggishness in the manufacturing sector investment in the fourth quarter ending March 31 and sought monetary policy intervention among other things for a quick revival of industrial growth.

A survey conducted by FICCI has suggested an upturn in sectors like leather, textiles, food products and cement, major segments such as automotive and capital goods have been seen exhibiting slow growth in the January-March quarter. Responses for the survey were drawn from 327 manufacturing units from both large and SME segments, FICCI said, adding that in terms of investment in manufacturing sector, 74 per cent respondents do not have plans for capacity additions in the next six months.

“This clearly indicates that investment will not pick up at least in the near future. Subdued investment sentiments are also reflected in the expected performance of the capital goods sector,” the survey report said. As regard inventories, around 30 per cent respondents said they were carrying more than their average levels of inventories and another 50 per cent maintained their average levels of inventories.

Higher than average inventory levels have been reported particularly in sectors like automotive, capital goods, metals and textile machinery. Whereas, sectors like leather, cement and textiles have reported less than their average levels of inventories.
The FICCI survey said the manufacturing sector has suggested addressing issues such as availability of raw materials at lower prices, adequate power supply, availability of cheap finance and monetary policy intervention to hasten the revival in industrial growth.