Weak Export Outlook for June Quarter Could Pull Down Manufacturing Growth: Ficci

Growth in India's manufacturing sector is expected to moderate during the first quarter of the current fiscal year due to a slowdown in global demand for Indian products, according to a survey by Ficci.

"The survey indicates moderation in the manufacturing activity in Q-1 of 2014-15 as compared to Q-4 of 2013-14...it is just not domestic factors but more importantly on export front the outlook seems to be weakening as a result of which manufacturing growth is likely to be pulled down," the survey said on Monday.

Out of 352 units, which participated in the survey, only 36 per cent have reported higher order books for April-June 2014-15.

The proportion of respondents expecting higher exports in the first quarter of this fiscal year has fallen to 36 per cent as against 58 per cent in the fourth quarter of 2013-14, it said.

In terms of investment, it remains subdued in manufacturing sector as was the case for previous quarters also, it noted.

In many sectors such as capital goods, chemicals, textiles machinery and paper, average capacity utilization has remained same in Q-4 of 2013-14 as was in Q-3 of 2013-14.

Further, it said that over 75 per cent of the respondents are not likely to hire additional workforce in next three months.

Out of 14 sectors, from which the survey gauges the expectations of manufacturers, five (capital goods, automotive, machine tools, cement and steel & metals) were likely to witness low growth (less than 5 per cent).

Only three sectors - leather, chemicals and ceramics - are expected to have a strong growth of over 10 per cent  in April-June 2014-15 and rest are likely to witness moderate growth.

Manufacturing, which constitutes over 75 per cent of the index, declined 1.2 per cent in March against growth of 4.3 per cent a year earlier.

During the April-March period of 2013-14, the sector's output contracted 0.8 per cent compared with a 1.3 per cent growth previously.