FICCI survey shows manufacturing in poor light for Q1

FICCI survey shows manufacturing in poor light for Q1

Growth dropped 53% in April-June quarter

FICCI survey shows manufacturing in poor light for Q1

‘Make in India’ notwithstanding, an industry survey has suggested that the manufacturing sector will continue to slowdown in the April-June quarter of this fiscal. 

It also said that there will be very bleak prospects of hiring in the sector and laggard exports.

Industry body FICCI’s latest quarterly survey has gauged the expectations of manufacturers for 13 major sectors namely textiles, capital goods, metals, chemicals, cement and ceramics, electronics, auto, leather & footwear, machine tools, food, tyre, paper and textiles machinery.

Responses have been drawn from 308 manufacturing units from large, medium and small segments with a combined annual turnover of over Rs 4 lakh crore.

The survey had earlier indicated revival in the manufacturing activity in the fourth quarter January-March of 2015-16, which seemed to be slowing down in April-June, FICCI said.

The percentage of respondents expecting higher growth in the April-June quarter has gone down to 53% compared with 60% for January-March, the quarterly survey of the industry body said.

Private investmentIn terms of investments, 75% respondents said they don’t have any plans for capacity additions for the next 6 months implying slack in the private sector investments in manufacturing to continue. The constraints, they said, were uncertainty in the policies, poor demand conditions, high cost of borrowing, delayed clearances and cost escalation.

Export outlook for manufacturing continued to have the downward trajectory in April-June with the proportion of respondents expecting higher exports in the quarter further falling to 36% against 41% in the previous quarter, according to the survey.

Hiring outlook too seems bleak in manufacturing in coming months as over 80% respondents were not likely to hire additional workforce in the next 3 months.