A little over two-fifths of participants expect their production level for the April-June 2017-18 quarter to be similar to that of the same period last year, while a third expect it to be higher, the latest FICCI quarterly survey on Indian manufacturing sector, based on responses from both large units and SMEs said.
For the same quarter, about 35 per cent of the sample respondents reported higher number of orders on a sequential basis while similar proportion reported no growth, the report said.
On an annual basis, half of sample covered is expecting exports to remain subdued in April-June quarter whereas about a quarter are expecting exports to be slightly higher than those of last year. Well over 90 per cent of the respondents feel the recent rupee appreciation would affect exports in the range of 0-5 per cent while a similar proportion expects imports to get cheaper by the same magnitude.
The average capacity utilisation of the textiles and technical textiles sector is hovering around 83 per cent with about 53 per cent of the respondents operating at the same capacity as that of last year. Given an already high capacity utilisation, almost 60 per cent of the respondents do not foresee any growth in the same especially when demand is not expected to rise much.
About 63 per cent of the respondents in textiles sector have reported that their current inventory level is at par with their average inventory level while a quarter are reportedly having higher inventories. Almost three quarters of the covered sample indicated that they are not planning to hire new workers in next three months while others responded affirmatively.
However, almost 70 per cent of the respondents are confident about manufacturing growth to revive in coming months while a quarter expects it to remain at the current level in the near future, the survey said. Suggestions to stimulate growth in the sector include reduction in transactional costs (energy, transportation costs, etc), need to further rationalise cotton cost and procurement procedure, reduction of interest rates, and increase in rate of interest subvention for exports.
Almost 70 per cent of the sample respondents indicated an increase in cost of production, primarily due to higher input costs including power and labour. Units in textiles sector are significantly affected by high prices of raw materials, labour related issues and low domestic and export demand.
Additionally, industry has suggested that some of older legislations like Hank yarn obligation, Hand loom Reservation Act, Pollution control norms, etc need a revision as such obligations create impediments to growth of the textile industry.
– Apparel and Textile News, Apparel Talk, Indian Apparel
