Moderate export growth, lower order books and rising raw material costs are expected to further moderate manufacturing growth in the third quarter of this financial year, shows a survey.
Ficci’s latest Quarterly Survey on Manufacturing Projects, revealed that 87 per cent of the respondents from 384 manufacturing units expected growth to moderate in their sector in the third quarter, a compared to the same quarter last year. In the previous survey, 74 per cent of respondents had expected growth to moderate.
Nor had manufacturers then expected exports to moderate significantly. In the latest survey, pessimism has risen on the outlook here, too. Only 29 per cent of respondents expected their exports to rise in Q3.
Against a huge growth in earlier months, exports grew by just over 10 per cent in October and at a 22-month low of just over four per cent in November.
About 56 per cent of respondents expected the rising cost of raw materials to persist and pose a significant constraint on profit margins. Job generation also looks bleak, as 66 per cent of respondents reported they were not planning to increase their workforce in the next three months, as compared with 57 per cent in the previous survey.