Manufacturing, IT sectors in Andhra log good growth

Andhra Pradesh registered an impressive growth rate in manufacturing, information technology and textiles sectors during the first half of the current financial year, according to an economic survey conducted by the Confederation of Indian Industry (CII), Southern Region.

The CII survey revealed that while the manufacturing sector increased its production by 13-15 per cent, the IT industry enhanced its revenue by 25-30 per cent and the textiles sector registered a growth rate of 15-20 per cent in exports during April-September 2006, compared with the October 2005- March 2006 period.

In the manufacturing sector, the survey stated, sales increased by 15-20 per cent. While the capacity utilisation remained the same (over 90 per cent), the prices were up 10 per cent and profit margins increased by 5-7 per cent due to strong demand.

In the IT sector, which is basically export driven, overseas billing was up by a whopping 50-60 per cent in the first half of the current year, compared with the second half of the previous year. The industry's workforce was up 20-25 per cent and manpower utilisation also increased significantly as against the previous six months.

Similarly, the survey revealed that the textile industry in the state registered 16-18 per cent increase in production, while sales and exports increased by 15-20 per cent. The employment level in the sector also registered a growth rate of 12-15 per cent during the first six months of the current year.

CII was also bullish on the above three sectors which, according to it, were likely to continue their growth momentum till the end of the current financial year. As per the CII's outlook, during October 2006-March 2007, IT products and services would grow at a rate of 30-40 per cent and textile industry would register a growth rate of 15-20 per cent, while the value of production in the manufacturing sector would increase by 15-20 per cent.

The textiles sector, however, is stated to be suffering from frequent power cuts, lack of skilled labour and raw material supply. The industry leaders have sought removal of excise duty on cotton and polyester and continuation of Technology Upgradation Fund for another couple of years.

Though the pharmaceutical industry was experiencing a tough competition, the survey pointed out, production in the sector increased by 10-15 per cent, while sales increased by 15-20 per cent, compared with the second half of the previous year.

The industry leaders have expressed concern over the rise in prices of raw materials adding to the cost of production.

On the other hand, the agro-based industry in the state remained stagnant with no growth in sales, production and profit margins during the six- month period.

Capacity utilisation also remained the same at 90 per cent while the inventory level was slightly up, as most of the companies were building up stocks for festive seasons.

CII stated that the agro industry outlook for the second half of the current year appeared moderate as the late monsoon and recent floods in the state would have an impact on agricultural production. It expects the industry to grow at 3-5 per cent in sales during October 2006-March 2007.