Global headwinds notwithstanding, FICCI’s latest quarterly survey on manufacturing reveals that sentiments remain positive for Indian manufacturing during first quarter of 2023-24.

The survey observed that after experiencing revival of Indian economy in the FY 2021-22, momentum of growth has continued for the subsequent quarters as well. 

In the Q4 Jan-March FY 2022-23, 55 per cent of the respondents reported higher production levels. 

Further, over 57 per cent of the respondents expect a higher level of production in Q1 Apr-Jun 2023-24 with an average increase in production in single digits. 

This assessment is also reflective in order books as 58 per cent of the respondents in Q1 Apr-Jun 2023-24 have had higher number of orders and demand conditions especially domestic, continue to be optimistic in Q2 Jul-Sept 2023-24 as well, noted FICCI survey.

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FICCI’s latest quarterly survey assessed the sentiments of manufacturers for Q1 April-June (2023-24) for nine major sectors namely Automotive and Auto Components, Capital Goods & Construction Equipment, Cement, Chemicals Fertilizers and Pharmaceuticals, Electronics and White Goods, Machine Tools, Metal and Metal Products, Textiles, Apparels and Technical Textiles, Toys and Handicrafts and Miscellaneous. 

Responses have been drawn from over 400 manufacturing units from both large and SME segments with a combined annual turnover of over ₹ 7.70 lakh crores.

Capacity addition and utilisation

The existing average capacity utilisation in manufacturing is around 75 per cent, which reflects sustained economic activity in the sector and is same as in the previous quarter, according to FICCI survey.

The future investment outlook has also improved as compared to the previous quarter as over 56 per cent of respondents reported plans for investments and expansions in the coming six months. 

This is an improvement over the previous survey where 47 per cent reported plans for investments in next six months.

Global economic slowdown caused by the recessionary climate in the America, EU and other developed nations and Russia-Ukraine war continue to add to volatilities in supply chain and demand.

High raw material prices, increased cost of finance, cumbersome regulations and clearances, high logistics cost due to high fuel prices, low global demand, high volume of cheap imports into India, shortage of skilled labour, highly volatile prices of certain metals etc. and other supply chain disruptions are some of the major constraints which are affecting expansion plans of the respondents, the findings of the survey showed.