India’s Q3 Manufacturing Outlook Improves, Cost of Doing Business A Concern: Report
New Delhi: Overall outlook for the country’s manufacturing sector has shown improvement in the third quarter of the current fiscal, though the cost of doing business remains a cause for concern and hiring prospects remain subdued, according to a survey by industry body FICCI.
The findings of the latest quarterly survey on manufacturing released this week also reflect sustained economic activity in the sector, with existing average capacity utilisation in the range of 65 to 70 per cent.
The percentage of respondents reporting higher production in the third quarter of 2021-22 (October-December 2021-22) was around 63 per cent, almost double than the year-round period (around 33 per cent), noted FICCI.
This assessment is also reflective in order books as 61 per cent of the respondents in October-December 2021-22 had a higher number of orders as against July-September 2021-22, the survey found.
Spiralling raw material prices, high cost of finance, the uncertainty of demand, shortage of working capital, high logistics cost, low domestic and global demand due to supply chain disruptions are some of the major constraints that are affecting the expansion plans of the respondents, it said.
The survey assessed the performance and sentiments of manufacturers for the third quarter for 12 major sectors namely automotive, capital goods, cement, chemicals, fertilisers and pharmaceuticals, electronics & electricals and medical devices among others.