Manufacturing sentiment positive in first quarter, shows Ficci survey

Federation of Indian Chambers of Commerce & Industry’s (Ficci’s) latest quarterly survey on manufacturing reveals that sentiment is positive during the first quarter (Q1).

Over 57 per cent of respondents expect a higher level of production during the April-June quarter. This is on the back of higher orders and continuing optimism in domestic demand conditions in Q2 as well, the survey added.

In the fourth quarter of FY23, 55 per cent of the respondents reported higher production levels. 

Responses have been drawn from over 400 manufacturing units from both large and SME (small and medium enterprise) segments with a combined annual turnover of over Rs 7.70 trillion. 

Ficci’s survey assessed the sentiments of manufacturers for Q1 in nine major sectors. They are automotive and auto components, capital goods and construction equipment, cement, chemicals, fertilisers and pharmaceuticals, electronics and white goods, machine tools, metal and metal products, textiles, apparels and technical textiles, toys and handicrafts as well as miscellaneous. 

According to the survey, the outlook for exports seems to be waning as about 30 per cent of the respondents reported higher exports in the March quarter of FY23. This compares to about 28 per cent of the respondents expecting their exports to be higher in the first quarter.

India’s merchandise exports in June contracted the most in more than three years as external demand ebbed because of an economic slowdown and high inflation in developed countries.

Exports fell 22 per cent year-on-year (YoY) to $32.97 billion last month — the sharpest decline since May 2020, when the contraction was 35 per cent. This is according to the data released by the department of commerce on Friday. 

The survey noted that the existing average capacity utilisation in manufacturing is around 75 per cent. This reflects a sustained economic activity in the sector and is the same as in the previous quarter.