FICCI Survey: Optimism Prevails in India’s Manufacturing Sector Amid Challenges
India’s manufacturing sector has displayed resilience and optimism in the first half of fiscal year 2023-24 (FY24), as indicated by the latest Quarterly Survey on Manufacturing conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI).
Production Outlook: A significant majority of respondents anticipate either increased or stable production levels in the fourth quarter of FY24, reflecting sustained growth momentum.
Read: Fashion District’s ‘Manufacturing Futures’ Initiative: Empowering Sustainable Fashion Innovators
Order Expectations: Around 85% of respondents foresee higher order volumes in Q4 FY24 compared to the previous quarter, highlighting positive sentiments in domestic demand conditions.
Textile Sector Prospects: Moderate growth expectations are projected for the textiles, apparel, and technical textiles sector, with the average capacity utilization currently at 75%.
Investment Intentions: More than half of the surveyed participants express intentions for investments and expansions over the next six months, indicating confidence in future prospects.
Challenges: Despite the positive outlook, challenges persist, including issues related to raw material availability, escalating prices, global demand uncertainties, skilled labor shortages, market volatility, increased power costs, and high bank interest rates, hampering expansion plans.
Export Trends: While 31% of respondents reported higher exports in Q3 FY24, over 40% expect year-on-year export growth in Q4, suggesting a positive outlook for international trade.
Employment: Approximately 40% of respondents plan to hire additional workers in the coming months, reflecting stability in the hiring outlook.
Production Costs: Production costs have increased for manufacturers in Q3 FY24, attributed to rising prices of raw materials, utilities, labor, freight charges, borrowing costs due to high interest rates, supply chain disruptions, and inventory carrying expenses.
Overall, despite facing multifaceted challenges, the manufacturing sector in India remains resilient, with prospects for growth and investment on the horizon.
Read This: Cotton Crisis in America: US Textile Mills Drops to Lowest Since 1885