FICCI survey indicates accelerated Indian economic growth in Q2 driven by higher demand
FICCI. About 80% of the respondents to the survey reported a higher number of orders and demand conditions in July-Sept 2023-24, while 79% recorded a higher level of production.
The existing average capacity utilisation in manufacturing is around 74%, which reflects a sustained economic activity in the sector, a FICCI statement said, adding that this was slightly higher than 73% capacity utilisation reported in the previous quarters.
As per the survey, the future investment outlook has also improved as compared to the previous quarter with over 57% of respondents reporting plans for investment and expansion in the coming six months.
This is also a slight improvement over the previous survey.
Demand, both at the domestic front or export front, has emerged as a key concern with over 40% respondents highlighting inadequate demand as a significant constraint.
Some other constraints, though not major ones, are high raw material prices, increased cost of finance, logistics, and other supply chain disruptions are some of the major constraints which are affecting expansion plans of the respondents, the industry body said.
There seems to be some moderation in the cost pressures on manufacturers in Q-2 July-September 2023-24, it said. The cost of production as a percentage of sales for manufacturers in the survey has risen for 58% respondents as compared to 77% respondents for the previous quarter.
But, high raw material prices and high energy cost are the two main factors contributing to the high production costs, it added.
Exports also have been better in the Q2 July-September 2023-24 since 48% respondents recorded higher exports compared to only 33% in the April-June quarter of 2023-24.
Hiring outlook looks stable with
