FICCI's latest Quarterly Survey on Manufacturing for the fourth quarter of 2013-14, indicates marginal improvement in the outlook for manufacturing sector vis-à-vis third quarter of 2013-14. However, the growth is expected to be subdued and as per the assessment of other parameters in the survey it is too early to term it as any recovery in the sector, noted FICCI.
The survey noted that slight improvement is perceived in production outlook for Q-4 due to further improvement expected on the export front and any sustainability of growth will depend a lot on domestic factors. Domestic factors continue to be a major cause of concern for manufacturing as per the survey.
Upturn in industrial sector is particularly evident in sectors like leather, textiles and chemicals. At the same time, sectors like automotive, capital goods and electronics are expected to witness sluggish growth in the current quarter. There seems to be some improvement in labour intensive sectors like textiles, footwear and leather in Q-4 which is a welcome trend.
FICCI’s latest quarterly survey gauges the expectations of manufacturers for Q-4 (January-March 2013-14) for fourteen major sectors namely textiles, capital goods, metals, chemicals, petrochemicals, cement, electronics, automotive, leather & footwear, machine tools, Food processing, textile machinery, paper and tyre. Responses have been drawn from 330 manufacturing units and associations from both large and SME segments with a combined annual turnover of over Rs 5 lakh crore.
Export outlook for manufacturing remains positive and seems to have improved somewhat in Q-4, as the proportion of respondents expecting higher exports in quarter-4 (Jan-Mar 2013-14) has improved to 58% as compared to 48% in previous quarter (q-3) and 52% in quarter-2 i.e. July-Sep 2013-14. Overall, export scenario is showing some improvement in current quarter as compared to previous quarters.
Over 70% of the respondents are not likely to hire additional workforce in next three months. Though this proportion is less than that of the previous quarter (75%) but overall the manufacturing units are not expected to add significantly to their existing workforce in coming months.
Based on expectations in different sectors, the Survey pointed out that seven out of fourteen sectors were likely to witness low growth (less than 5%). Only two sectors namely, leather and textiles are expected to have a strong growth of over 10% in January-March 2013-14 and rest all the sectors are likely to witness moderate growth.