'Manufacturing sector's sentiment positive in Q4 FY19'

Last Updated: Mon, May 13, 2019 12:26 hrs
Federation of Indian Chambers of Commerce and Industry (FICCI) (Image Courtesy: Wkipedia)

New Delhi: The overall sentiment in the manufacturing sector was positive during the January-March quarter of financial year 2018-19, a FICCI report said on Sunday.

Capacity utilisation in the manufacturing sector rose by 80 per cent during the fourth quarter (Q4), said the 'Quarterly Survey on Manufacturing'.

"Overall sentiment in the manufacturing sector remains positive as the proportion of respondents reporting higher output growth (around 54 per cent) during the January-March 2018-19 has remained same as compared to Q3 of 2018-19," it said.

On the hiring front in the sector, the report noted that the outlook for near future seemed to have marginally improved.

"While in Q4 of 2017-18, 70 per cent respondents mentioned that they were not likely to hire additional workforce, this percentage has come down to 62.5 per cent for Q4 of 2018-19. Going forward it is expected that hiring scenario will improve further. Around 37.5 per cent in Q4 of 2018-19 as compared to 30 per cent in Q4 of 2017-18 are looking at hiring more people now."

In the survey, the industry body assessed the sentiments of manufacturers Q4 2018-19 for twelve sectors including automotive, capital goods, cement and ceramics, chemicals, fertilizers and pharmaceuticals, electronics and electricals, leather and footwear, metal and metal products, paper products, textiles, textile machinery and tyres.

Responses were drawn from over 300 manufacturing units from both large and SME segments with a combined annual turnover of over Rs 3.56 lakh crore, FICCI said.

In terms of order books, 44 per cent of the respondents in January-March 2019 are expecting higher number of orders against 43 per cent in October-December 2018-19.

The cost of production as a percentage of sales for manufacturers in the survey has risen for 72 per cent respondents against 62 per cent during the same period the previous fiscal, according to the report.

"This is primarily due to increased cost of raw materials, wages, power cost, rising crude oil prices, increase in finance cost and rupee depreciation," said the report.

On the outlook for investments, the report estimated "moderate" investment levels but said that it would improve marginally.