Home » Cost of production increases significantly, impacting manufacturing competitiveness: FICCI survey

Cost of production increases significantly, impacting manufacturing competitiveness: FICCI survey

Cost of production increases significantly, impacting manufacturing competitiveness: FICCI survey

FICCI’s latest quarterly survey has reported a decline in the outlook for the sector for Q-4 of 2016-17 due to rising cost of production, which has impacted the competitiveness of the sector in the last few months. FICCI’s latest Quarterly Survey on Manufacturing suggests a slight decline for the manufacturing sector outlook in the fourth quarter (January-March 2017) of the fiscal as the percentage of respondents reporting higher production and exports in the fourth quarter have declined vis-à-vis previous quarter. However, it is also notable in the survey that the percentage of respondents reporting lower production has reduced by half over the previous quarter, thereby indicating a more stable outlook in months to come.

The proportion of respondents reporting higher growth during the January-March 2017 quarter has slightly fallen from 48 per cent (revised) in October-December 2016-17 to 46 per cent. The percentage for the third quarter, i.e., October-December 2016-17, has undergone a revision with this survey. Respondents reporting negative growth have come down to 14 per cent in January-March 2017 from 29 per cent as reported in the previous quarter.

The slight dip in the outlook for manufacturing production in the fourth quarter of the current financial year is attributable to primarily increased cost of production impacting the competitiveness of the sector and to a little extent also due to uncertain outlook on the export front. However, the percentage of respondents reporting fall in exports has reduced from 30 per cent in the previous quarter to 18 per cent in the January-March quarter.

FICCIÂ’s latest quarterly survey assessed the expectations of manufacturers for Q-4 (January-March 2017) for twelve major sectors namely auto, capital goods, cement and ceramics, chemicals, electronics & electricals, food products, leather and footwear, machine tools, metal and metal products, paper products, textiles and technical textiles and textiles machinery. Responses have been drawn from 320 manufacturing units from both large and SME segments with a combined annual turnover of over Rs 3.8 lakh crore.

In terms of order books, almost 47 per cent of respondents in the January-March 2017 quarter as compared to 48 per cent of respondents in the October-December 2017 quarter, reported higher order books.

Comments

Leave a Reply

Your email address will not be published.