Manufacturing exports and new investment outlook weaken

Mumbai, Ta. Monday, July 20, 2020

The percentage of manufacturing units that have achieved growth has declined to 10 per cent in the June quarter from 12 per cent in the March quarter, according to a report by industry body FICCI.

This is evident from a survey of about 200 manufacturing units in the large and SME segments with an annual combined turnover of over Rs 2.50 trillion.

The easing of the lockdown has had the worst impact on auto companies, with current orders and demand weakening. Other sectors where factory operations have been sluggish include leather and footwear, electronics and electrical and textile machinery, the report said.

In addition, the percentage of units expecting lower or similar production was 20 per cent in the June quarter as against 3 per cent in the March quarter.

The outlook for recruitment in the manufacturing sector is looking bleak. Six per cent of the units surveyed said they were not in the mood to recruit for the next three months.

Thus, the situation is worrying in terms of employment. As many as eight units in the March quarter said they were not in the mood to recruit extra. The future also looks bleak in the export sector.

Sectors like auto, textile machinery and leather are considering relying on more than one country for their raw material requirements. The future of new investment also looks very bleak. Only 5 per cent of the companies participating in the survey said they plan to invest in the next six months.