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Manufacturing outlook improves marginally in Q1 2017-18: Survey
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SME Times News Bureau | 18 Jul, 2017
Industry lobby Ficci on Monday said that India's manufacturing sector
outlook improved slightly during the first quarter (Q1) of the current
fiscal.
The latest quarterly survey of manufacturing sector
showed that percentage of respondents "reporting higher production" in
Q1 increased vis-à-vis previous quarter.
"Ficci survey suggests
that the percentage of respondents reporting lower production has
reduced considerably over the previous quarter, thereby indicating a
more positive outlook in months to come," the survey said.
"The
proportion of respondents reporting higher output growth during the
April-June 2017-18 quarter has risen slightly from 47 per cent in
January-March 2016-17 to 49 per cent."
The survey disclosed that
percentage of respondents "reporting negative growth" came down to 17
per cent in April-June 2017-18 from 27 per cent as reported in the
previous quarter.
"However, the cause for worry was the rising
cost of production (for a little over two-thirds of the respondents),"
the survey noted.
"The cost of production as a percentage of
sales for product for manufacturers in the survey has risen
significantly as 69 per cent respondents in Q1 2017-18, against 60 per
cent respondents, reported cost escalation in last quarter. This is
primarily due to rise in minimum wages and raw material cost."
In
terms of exports, the survey pointed out that Q1 outlook had marginally
improved as percentage of respondents expecting a fall during the
quarter under review came down from 22.8 per cent in Q4 (2016-17) to
18.5 per cent.
"Hiring outlook for the sector remains subdued in
near future as 73 per cent of the sample participants in Q1 2017-18
said that they are unlikely to hire additional workforce in next three
months," the survey said.
"However, when compared on a sequential
basis, this proportion reflects a mild improvement over the previous
quarter when 77 per cent of the respondents were reportedly averse to
hire additional workforce."
In addition, the survey predicted
moderate growth in metals, leather, footwear, machine tools and capital
goods sector during the Q1 2017-18.
"Low growth is expected in
sectors like chemicals, automotive, textiles and cement. Only in case of
electronics and electricals high growth is expected for Q1 2017-18,"
the survey said.
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