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India’s manufacturing sector outlook to remain positive for Q2FY19: FICCI

12 Oct 2018 Evaluate

With higher production in manufacturing, Federation of Indian Chambers of Commerce and Industry (FICCI) in its latest quarterly survey has stated that the outlook for India’s manufacturing sector is positive for July-September quarter (Q2) even as the hiring outlook for the sector remains subdued. Besides, the survey report showed that exports to rise in the second quarter.

According to the survey report, a total of 61% respondents said output will grow during July-September 2018 quarter from 49% in April-June 2018. This is the highest percentage of respondents expecting higher production since Q2 of 2015-16 where 63% of respondents expected higher production -- a 12-quarter high sentiment. The percentage of respondents reporting low production decreased to 9% in Q2FY19 from 13% in Q1FY19. However, rupee depreciation has not led to any significant increase in exports during the first quarter as 83% of the respondents reported that shipments were not affected much by a weakening rupee.

As per the report, high growth is expected in cement and ceramics, capital goods, automotive and medical devices and technologies in Q2 2018-19, whereas textiles, textile machinery, metal and metal products, electronics and electricals, chemicals, fertilisers and pharmaceuticals, food products and paper products may witness moderate growth. But, hiring outlook for the manufacturing sector remains subdued in near future as 65% of the respondents mentioned that they are not likely to hire additional workforce in next three months.

The FICCI’s latest quarterly survey assessed the sentiments of manufacturers for the second quarter for twelve major sectors -- automotive, capital goods, cement and ceramics, chemicals, fertilisers and pharmaceuticals, electronics and electricals, food products, leather and footwear, medical devices and technologies, metal and metal products, paper products, textiles machinery and textiles. Responses have been drawn from over 300 manufacturing units from both large and SME segments with a combined annual turnover of over Rs 2.8 lakh crore.

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