India's manufacturing biz sentiment positive in H1 FY24: FICCI survey

Around 87 per cent of respondents expect either higher or same level of production in Q4 FY24. In Q3, 73 per cent of respondents had reported higher production levels.

Eighty-five per cent of the respondents in Q4 FY24 are expecting higher orders compared to Q3. Domestic demand conditions reflect optimism as well in the current quarter, FICCI said in a release.

Growth expectations for Q4 FY24 for textiles, apparel and technical textiles sector is moderate. The average capacity utilisation level of this sector is 75 per cent now.

The existing average capacity utilisation in manufacturing is around 73 per cent, which reflects sustained economic activity in the sector, which is more or less same as reported in previous surveys.

The future investment outlook also looks steady, with over half of the respondents indicating plans for investments and expansions in the next six months.

Challenges related to the availability of raw materials and their escalating prices, uncertainty in global demand, shortage of skilled labour, market volatility, increased power costs, unutilised capacity and high bank interest rates are some of the major constraints that are affecting expansion plans of the respondents.

About 31 per cent respondents reported higher exports in Q3 FY24. Furthermore, over 40 per cent expect their exports to be higher year on year (YoY) in Q4.

The hiring outlook remains stable as close to 40 per cent of the respondents are looking at hiring additional workforce in the next three months.

Production cost seems to have increased for manufacturers in Q3 FY24. The cost of production as a percentage of sales for manufacturers in the QSM has risen for 67 per cent of respondents, which is slightly more than the figure reported in the survey for the previous quarter.

Increase in price of raw material, utilities, labour cost, freight charges, increase in borrowing cost due to high interest rate and supply chain disruption have been the main contributors to increasing cost of production.

Other factors responsible for escalating production costs include high cost of carrying inventory.

Fibre2Fashion News Desk (DS)