In the second quarter of the financial year 2023-24, Indian manufacturing showcased robust growth, defying the global economic slowdown observed in developed nations. According to the latest quarterly survey by the Federation of Indian Chambers of Commerce and Industry (FICCI), this acceleration is expected to persist throughout the remaining quarters of the fiscal year.

The survey, encompassing ten major sectors including automotive, capital goods, pharmaceuticals, textiles, and electronics, gathered insights from more than 380 manufacturing units, collectively representing an annual turnover exceeding Rs 4.88 lakh crores. Notably, the current average capacity utilization in the Indian manufacturing sector stands at approximately 74%, a slight increase from the previous quarters.

One promising aspect is the improved outlook for future investments, with over 57% of respondents expressing plans for investments and expansions in the coming six months. This positive shift signals a gradual recovery and aligns with the nation’s economic trajectory.

However, the survey also identified key challenges hindering the sector’s full potential. The most prominent constraint, acknowledged by over 40% of respondents, is the limitation imposed by demand, both domestic and in exports. High raw material prices, increased finance costs, logistics, and other supply chain disruptions were cited as additional constraints impacting the expansion plans of manufacturing units.

Export performance displayed resilience, with more than 48% of respondents reporting higher exports in July-September 2023-24, a notable improvement from the previous quarter. Despite this positive trend, FICCI emphasizes the need for sustained growth in export demand to align with the country’s growth aspirations.

On the employment front, the survey indicates a stable hiring outlook, with approximately 38% of respondents considering additional workforce recruitment in the next three months. While most sectors reported a sufficient labor force, 18% of respondents expressed concerns about the availability of skilled workers in their respective industries.

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