Less optimistic outlook in FICCI manufacturing survey

21 Dec '17

2 min read

The latest quarterly survey on manufacturing by the Federation of Indian Chambers of Commerce and Industry (FICCI) suggests a slightly less optimistic outlook for the manufacturing sector in the October-December quarter of fiscal 2017-18 as the percentage of respondents reporting higher production in third quarter has fallen compared to the previous quarter.

The capacity utilization in manufacturing remains low, the inventory situation hasn't changed much, outlook for exports seem to be relatively less optimistic and low growth is expected in sectors like textiles & technical textiles and leather & footwear, says a FICCI press release citing the survey.

Forty seven per cent respondents reported higher output growth during the third quarter compared to 50 per cent in the second, according to the survey. However, the percentage of respondents reporting low production has also come down to 15 per cent from 18 per cent in the second quarter.

Factors for this trend include rupee appreciation impacting exports, issues related to the implementation of goods and services tax (GST) and subdued demand in several sectors.

Increasing imports, excess capacities, lower domestic demand from industrial sectors, high raw material cost, high interest rates are some of the major constraints affecting expansion plans of the respondents. (DS)

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