FICCI survey shows positive sentiment in manufacturing sector

FICCI survey shows positive sentiment in manufacturing sector

Agency News

New Delhi, May 12 : The latest ‘Quarterly Survey on Manufacturing’ by business chamber FICCI highlights a continued positive sentiment for manufacturing sector in Q4 of 2018-19.

The survey also says that the overall sentiment in the manufacturing sector remains "positive" as the proportion of respondents reporting higher output growth (around 54%) during the January-March 2018-19 has remained same as compared to Q3 of 2018-19. An estimated 37.5 per cent in Q4 of 2018-19 as compared to 30 per cent in Q-4 of 2017-18 are looking at hiring more people now, noted the Survey.

"First time in last many quarters, the overall capacity utilisation in manufacturing has witnessed an increase to 80 per cent in Q-4 2018-19. It was hovering at 75 per cent for last many quarters, as per the survey.On hiring front, the outlook for the sector seems to have slightly improved for near future," it claims.

According to a FICCI release, the study also says that while in Q-4 of 2017-18, 70 per cent respondents mentioned that they were not likely to hire additional workforce, this percentage has come down to 62.5 per cent for Q-4 of 2018-19. Going forward it is expected that hiring scenario will improve further.

FICCI’s latest quarterly survey assessed the sentiments of manufacturers for Q-4 (January-March 2018-19) for twelve major sectors namely automotive, capital goods, cement and ceramics, chemicals, fertilizers and pharmaceuticals, electronics & electricals, leather and footwear, metal & metal products, paper products, textiles, textile machinery, tyre and miscellaneous.

Responses have been drawn from over 300 manufacturing units from both large and SME segments with a combined annual turnover of over Rs 3.56 lakh crore. The cost of production as a percentage of sales for manufacturers in the survey has risen for 72 per cent respondents. This, of course, is significantly higher than the percentage of 62 per cent for previous year.

This is primarily due to increased cost of raw materials, wages, power cost, rising crude oil prices, increase in finance cost and rupee depreciation, the release said here. The overall capacity utilisation in manufacturing has witnessed a slight increase to 80 per cent in Q-4 2018-19.The average capacity utilisation for the manufacturing sector in the last few quarters has been around 75 per cent only as per the survey.