Automobile, IT sectors report growth in Tamil Nadu: CII survey

The results of the Confederation of Indian Industry (CII), southern region, business outlook survey recently carried out in Tamil Nadu showed that automobiles and information technology sectors reported growth of 20 and 25 per cent respectively.

While industries like textile and chemicals and fertilisers registered 10 per cent growth each, cement industry grew marginally.

The top five sectors surveyed in Tamil Nadu were automotive and auto components, information technology, textile industry, cement industry and chemicals and fertilisers. The industry-specific trends highlighted by the survey are as follows:

The automotive and auto components industry in Tamil Nadu reported a 20-per cent growth in profits in 2004-05. However, high input costs cast a shadow on the performance.

In 2005-06 the auto components industry is expecting exports to grow at an impressive 20-25 per cent. The industry is concerned about lack of good-quality steel scrap and delays at ports, said a press statement.

The information technology industry posted a 25 per cent increase in profits. The headcount rose by 25 per cent last fiscal and is expected to increase by nearly 60 per cent in the current financial year.

The industry hopes to increase overseas billings by nearly 40 per cent in 2005-06. The major concerns of the industry include lack of office space and slow communication networks.

The textiles industry posted a 10 per cent growth in profits in 2004-05 due to higher volumes. The industry increased production and capacity utilisation between 10 and 15 per cent. With the lifting of quotas, the industry is expecting a 15 per cent growth in sales in 2005-06.

The government's decision to allow women to work in night shifts has led to higher production. However, the ever-growing demand is creating a need for additional capacity. Now the industry faces the crucial challenge of raising funds for expanding capacity.

The chemicals and fertiliser industry posted a 10 per cent growth in profits in 2004-05. However, the industry had to cut down production costs to keep the prices under control. The industry expects a similar trend in the 2005-06. It is, however, worried about cheaper imports.

The cement industry posted a marginal growth in 2004-05. The growth in volume was marginal. Cement exports fell 4 per cent for the nine-month period ending December 2004. Though prices have been fluctuating, the industry hopes to grow in 2004-05 due to post-tsunami reconstruction activity.

According to a press statement, the top five sectors for the survey were identified on the basis of their contribution to state gross domestic product (SGDP).