Mixed signals for upturn in manufacturing growth in Q4: Ficci

Giving mixed signals for upturn in the manufacturing growth, a Ficci survey today said the sector is expected to get a boost during the fourth quarter of the fiscal from steps taken by the government in the last few months, including those announced in the Budget.

It said that the number of respondents reporting higher levels of production in the fourth quarter of 2012-13 has dropped to 36%, from over 40% in previous few quarters.

"Some upturn is evident in sectors like leather, textiles, food products and cement. But some major sectors like automotive and capital goods are expected to witness sluggish growth in the current quarter."

Out of 327 units which participated in the study, over 39% respondents reported higher order books for January- March 2012-13 as compared to 33% in Q3 of 2012-13.

Majority of the respondents said that they do not have any plan for capacity addition in next six months, the survey said, adding that 30% reported that they are carrying more than their average levels of inventories in sectors like automotive, capital goods and textiles machinery.

Further, it said that the export outlook for manufacturing seems to have again turned bleak.

"For the current quarter (Q4) 40% expect their export levels to be higher than last year for the same quarter. In the previous survey, we had 54% respondents expecting exports to be higher in Q3 vis-a-vis same quarter last year," it said.

Over 75% said they are not likely to hire new workforce in next three months.

"Some major initiatives taken by the government in the last few months coupled with some budget announcements are expected to improve the prospects for manufacturing in coming months," it said.

In the Budget, the government has proposed enhancing the refinancing capability of SIDBI to Rs 10,000 crore per year for MSMEs besides attracting new investment.