New Delhi, Oct 6 (IANS) Sentiment among Indian manufacturers improved in the second quarter of FY27 with stronger expectations for production, demand, exports and hiring, according to a report.
Analysis by FICCI showed that around 95 per cent of respondents reported higher or unchanged production levels in Q2 FY27, compared with 77 per cent in the previous quarter.
Demand conditions also improved with 90 per cent of manufacturers reporting higher or stable order books, up from 77 per cent in Q1.
FICCI said the findings point to a recovery in business sentiment despite global geopolitical uncertainties, supported by stable domestic economic conditions.
Capacity utilisation rose to about 75 per cent in Q2 from 72 per cent in the previous survey, indicating improved utilisation of existing manufacturing assets.
The industry’s investment outlook for the next six months remained broadly stable, although respondents continued to cite geopolitical tensions, tariffs, trade restrictions, demand uncertainty, skill shortages, raw material constraints, logistics costs and regulatory issues as challenges to expansion.
Moreover, export sentiment also strengthened.
According to the report, about 80 per cent of respondents reported higher or unchanged exports compared with the year-earlier period, against 74 per cent in the previous quarter.
FICCI attributed the improvement partly to export diversification efforts by both the government and industry.
Manufacturers also reported stronger hiring plans, with 43 per cent indicating they expect to recruit additional workers over the next three months, compared with 35 per cent in the previous quarter.
Among sectors, automotive and auto components showed the strongest growth outlook, while machine tools and metal products were expected to record strong-to-moderate growth.
Capital goods, chemicals, glass, electronics, electrical equipment and textiles were projected to post moderate growth.
However, rising costs remained a concern. Nearly 83 per cent of respondents reported higher production costs as a share of sales, up from 79 per cent in the previous quarter.
The report noted that financing conditions remained comfortable with 90 per cent of respondents reporting adequate access to bank funding, although the average interest rate paid by manufacturers rose to 9.1 per cent from 8.9 per cent in the previous quarter.
–IANS
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