Web Exclusive | February 2019
Industry's production front looks up
Hiring and production outlook is expected to be better, while exports will be affected due to global
demand factors in manufacturing sector in October-December this fiscal, said a Ficci survey. Ficci's
latest Quarterly Survey on Manufacturing presents a better outlook for hiring and production, the industry
body said in a statement. The survey portrays a better outlook for the manufacturing sector in Q-3
(October-December 2018-19) as the percentage respondents reporting higher output growth during the third
quarter was 54 per cent as compared to 47 per cent in the same period previous fiscal.
The percentage of respondents reporting low production was only 13.5 per cent in Q-3 2018-19 as compared
to 15 per cent in Q-3 of 2017-18. Similarly, on hiring front the outlook for the sector seems to have
slightly improved for near future. While in Q-3 of 2017-18, 70 per cent respondents mentioned that they
were not likely to hire additional workforce, this percentage has come down to 65 per cent for Q-3 of
2018-19. It is expected that hiring scenario will improve further, noted the Survey.
The study assessed the sentiments of manufacturers for Q-3 this fiscal, for eleven major sectors namely
automotive, capital goods, cement and ceramics, chemicals, fertilisers and pharmaceuticals, electronics &
electricals, leather and footwear, metal & metal products, paper products, textiles, textile machinery and
tyre. Responses have been drawn from over 300 manufacturing units from both large and SME segments with a
combined annual turnover of over 2.2 lakh crore.
In terms of order books, 43 per cent of the respondents in October-December 2018 are expecting higher
number of orders as against 42 per cent. The outlook for exports is somewhat stable as 36 per cent of the
participants are expecting a rise in exports for Q-3 2018-19 and 32 per cent are expecting exports to
continue on same path as that of same quarter last year, observed the survey.
However, it said the rupee depreciation has not led to any significant increase in exports as 78 per cent
of the respondents reported that the exports were not affected much by rupee depreciation. Thereby,
emphasizing that there were other global factors that are restricting growth of our exports. The survey
also said that the overall capacity utilisation in manufacturing remains low at 75 per cent in Q3. The
average capacity utilisation for the manufacturing sector in the last few quarters has been around 75 per
cent only. High raw material prices, cost of finance, uncertainty of demand, shortage of skilled labour,
high imports, requirement of technology upgradation, excess capacities, delay in disbursements of state
and central subsidies are some of the major constraints which are affecting expansion plans of the