Manufacturing growth to be subdued in Q3: Ficci

Bengal Chief minister Mamata Banerjee , however, could not meet the Ficci members as she was traveling to districts said Singh

Indian manufacturing sector is likely to witness subdued growth in the third quarter of the current fiscal, according to the latest quarterly survey on manufacturing by Ficci.

The latest survey results indicates continuation of growth, though subdued, in the manufacturing activity in Quarter under review in FY14.  The survey result was released on Monday here during Ficci’s National Executive Committee Meeting.   

"This low or subdued growth is supported primarily by some improvement on export front. However, we are seeing rising concerns over the cost of credit by the manufacturers as compared to previous surveys,”said Naina Lal Kidwai, president at Ficci.

The survey, conducted by apex chamber body,  pointed out that the proportion of respondents reporting higher levels of production in third quarter of 2013-14 has slightly increased to 52 per cent as compared to over 48 per cent in previous quarter and 45 per cent for the same quarter last year.Upturn in industrial sector is particularly evident in sectors like leather, textiles, cement, chemicals and textiles machinery.

At the same time, sectors like automotive, capital goods and electronics are expected to witness sluggish growth in Q-3, the survey claimed.

According to the survey, in terms of investment, it remains subdued in manufacturing sector as was the case for previous quarter also with 72 per cent  respondents not having any plans for capacity additions for the next six months as compared to 74 per cent respondents in the previous survey.

Though, the proportion of respondents reporting plans for capacity additions in next six month has slightly increased from 26 per cent in previous survey to 28 per cent in the current survey but it could hardly be construed as any upturn in investment activity as of now. "Thus hiring is also going to be muted,” added A Didar Singh, secretary general at Ficci.  

Over 75 per cent of the respondents are not likely to hire additional workforce in next three months.

This proportion is the same as in previous quarter but has increased as compared to earlier quarters in which the proportion was around 70 per cent, the survey noted.