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Indian manufacturing sector sentiments improved for Q1 24-25: FICCI
Industry News- Jul 29,24
The survey reveals that 78% of respondents anticipate higher or stable production levels, up from 57% in the previous year.
According to FICCI's ‘Quarterly Survey on Manufacturing’, sentiments in the Indian manufacturing sector have improved for the first quarter of the financial year 2024-25. The survey reveals that 78% of respondents anticipate higher or stable production levels, up from 57% in the previous year. Domestic demand is also showing positive trends, with 67% of respondents expecting an increase in orders.
The survey, which covers eight major sectors including automotive & auto components, capital goods & machine tools, cement, chemicals, fertilisers & pharmaceuticals, electronics & electricals, metal & metal products, and textiles, apparels & technical textiles, includes feedback from manufacturing units with a combined annual turnover exceeding Rs 3 trillion. Current manufacturing capacity utilisation is reported at around 75%, indicating steady economic activity.
Investment outlook remains optimistic, with 41% of respondents planning to invest and expand in the next six months. However, challenges such as high interest rates, delayed customer payments, and difficulties in acquiring skilled labour are cited. Logistical issues and market challenges, including competition from cheaper imports and subsidised products, are also noted.
The survey found that 86% of respondents had increased or maintained inventory levels in Q4 FY 2023-24, and about 83% expect these levels to remain high in Q1 FY 2024-25. On the export front, 56% of respondents reported increased exports in Q4 FY 2024, with around 70% expecting higher exports in Q1 FY 2024-25.
The hiring outlook is positive, with nearly 50% planning to expand their workforce in the next three months. The average interest rate for manufacturers is 9.8%, and over 80% report adequate availability of funds from banks for both working capital and long-term investments.
Production costs have remained high, with nearly 60% of respondents noting an increase as a percentage of sales. Contributing factors include rising prices for raw materials, wages, utility and energy costs, and logistics expenses. Despite this, 83% of respondents do not face labour shortages, though 17% report difficulties in finding skilled labour, highlighting a need for enhanced efforts from both government and industry.
(Source: ET)
Indian manufacturing sector
labour shortages
Indian manufacturing
FICCI
automotive & auto components
capital goods & machine tools
cement
chemicals
fertilisers & pharmaceuticals
electronics & electricals
metal & metal products
textiles
apparels & technical textiles
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