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Jobs surge in manufacturing sector in Q3, but exports may remain weak; here’s what FICCI survey says

FE Online
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Even as hiring and production outlook is expected to improve, exports are likely to be affected on account of global demand factors in the manufacturing sector in Q3 FY19, a survey by an industry body said. An increase in percentage of respondents can be seen in reporting higher output growth during the third quarter (54 per cent) as against (47 per cent) in the corresponding period of previous fiscal, FICCI s latest Quarterly Survey on Manufacturing said.

The percentage of respondents reporting low production was only 13.5 per cent in Q-3 FY19 as compared to 15 per cent in Q-3 FY18. On the hiring front too, the outlook for the sector seems to have slightly improved for near future, the survey said. However, the outlook for exports is somewhat stable.

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The rupee depreciated in the last few months, but no significant increase in exports can be seen, the survey noted, adding there global factors are restricting growth of the exports.

A higher number of the respondents maintained either more or same level of inventory, which is slightly higher as compared to in the previous quarter but less than the case in Q3 of 2017-18. This has been due to low domestic and export demand.

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The cost of production as a percentage of sales for manufacturers in the survey has risen as per respondents. This is significantly higher for Q-3 of 2017-18. This is primarily due to increased cost of raw materials, wages, power cost, rising crude oil prices, increase in finance cost and rupee depreciation.