Industry body FICCI sees revival of growth in Q1
AS a result of higher orders on the books and a somewhat better export outlook, India’s manufacturing sector is projected to show a modest growth rate during January-March quarter of 2011-12, says a survey by industry body FICCI.
The chamber says that 36 per cent of the 336 manufacturing units and associations who participated in it expects growth in manufacturing to revive in the last quarter. This is in contrast to only 13 per cent and 26 per cent respondents in Q3 and Q2 of 2011-12 respectively.
The survey “projects a revival in the growth of the manufacturing sector in the fourth quarter of 2011-12 after the sector’s growth almost bottomed out in the third quarter.
The survey revealed that increasing cost of raw materials, not higher interest rates, had constrained growth. About 58 per cent respondents said that rising cost of raw materials was the most important constraint for the growth of the sector; only 34 per cent respondents felt that rising cost of interest was the most important constraint.
The survey noted some improvement in demand conditions for the manufacturing sector in Q4 as compared to last quarters.
“While in the last two quarters (July-September 2011 and October-December 2011) over 38 per cent and 29 per cent respondents reported higher orders compared to the previous quarters, in Q4 over 47 per cent respondents reported higher orders than in Q3 (October-December 2011),” it said.
FICCI projects a revival in the sector after its growth bottomed out in 2011-12 Q3
FICCI’s latest quarterly survey gauges the expectations of manufacturers for Q4 for major sectors such as textiles, capital goods, metals, chemicals, tyres, cement, electronics, automotive, textiles machinery, leather goods, footwear, and machine tools.
FICCI’s survey noted some improvement in capacity utilisation with 44 per cent respondents reporting that their capacity utilisation was higher than last year as compared to only 36 per cent respondents in Q3.
Capacity utilisation levels are particularly low in textiles and steel sectors.