Manufacturing growth may moderate in third quarter, says Ficci

Country's manufacturing sector is likely to experience moderate growth in the third quarter of the current fiscal, the Federation of Indian Chambers of Commerce and Industry (FICCI) said in New Delhi on Sunday.

According to the chamber's latest quarterly survey, industrial production grew at a three-month high of 2.5 per cent in September owing to better mining and manufacturing output.

The manufacturing output grew by 2.5 per cent in September, compared to 1.4 per cent in the same month a year ago.

"The outlook on the basis of FICCI Manufacturing Survey for Q3 of 2014-15 is less optimistic than Q2 of 2014-15 for the manufacturing sector as the proportion of respondents expecting higher production vis-a-vis last year has fallen to 52 per cent in Q3 from 62 per cent in Q2", FICCI said.

Growth is likely to be more broad based during the third quarter as most of the sectors are expecting improvement in production, added.

In terms of order books, 43 per cent respondents have reported higher order books for the Oct-Dec 2014-15 quarter, which remains same as in the previous quarter, indicating no significant change in the demand conditions, the survey noted.

Inventory levels too continue to indicate a subdued demand scenario as currently around 37 per cent respondents reported that they are carrying more than their average inventory levels, it added.

The survey gauges the expectations of manufacturers for the third quarter for thirteen major sectors, namely textiles, capital goods, metals, chemicals, cement and ceramics, electronics, auto components, leather and footwear, machine tools, food and fast-moving consumer goods (FMCG), tyre, paper and textiles machinery.

Responses have been drawn from 392 manufacturing units from both large and small and medium (SME) segments with a combined annual turnover of over Rs.400,000 crore.