The Federation of Indian Chambers of Commerce and Industry's latest quarterly survey on manufacturing projects showed continued moderation in growth for the sector. This slowdown is a result of moderation in consumer demand, moderate export growth and rising raw material costs.
According to the survey based on responses from 384 manufacturing units, 87 per cent of total respondents said that they expect growth to moderate in their sector in the third quarter of the current fiscal as compared to the year- ago period. In the previous survey, over 74 per cent of the respondents had expected growth to moderate, according to FICCI.
“Also in the last survey, manufacturers did not expect exports to moderate significantly but by contrast, in the latest survey pessimism has risen on the exports outlook as well,” added a FICCI statement.
Based on expectations in different sectors, the survey pointed out that nine out of 13 sectors were likely to witness low (less than five per cent) to moderate (between 5 and 10 per cent) growth in the third quarter.
These sectors are cement, steel, textiles, chemicals, capital goods, paper and electricals. Sectors such as automotive, auto-components, leather and food processing and miscellaneous are likely to witness strong growth of over 10 per cent in third quarter, according to the survey.