Different surveys had been portrayed and analysis has been laid our in many different articles, multiple studies and assumptions are intended to make the positive side with the covid impact.
Manufacturing sector remains the backbone of the economy predominantly, right through the covid lockdown, this is the only reason such industrial sector lead to create the formation of the needs and livings of the community. Even, we presume lockdown or covid impacted layoffs, still manufacturing sector remains the strength, most essential items had to be served by the government. So, such data and figures are more an accurate figures, but not highlighting implications of the economic stability.
Manufacturing activity in the July – september quarter of the current financial had improved significantly, even as the cost of doing business risen, data by FICCI.
The Percentage of respondents reporting higher production in the second quarter of 2021-22 was much above the approx 61 percent. Although this data had shown significant low down to this mark. But, more and mare sights of the same been ignored. It is largely considerably important point to consider, with the kind of structure India worked in, manufacturing is being the pre-dominating part.
Below, 50% mark utilisation, is not at all the good figure of manpower and space utilisation, although it is more shocking. A lot on the same, has to be discussed, where it results –
1. Steep fall in India’s Money Formation;
2. Generation is less than the consumption;
3. Downfall in Country Reserves;
4. % Inflation rate goes up; etc
It is nowhere near the point of comfort, but it’s alarming. Reason, with the highly intensively populated country like India, where every year thousands of institutional hubs are skilling millions manpower resources. With the downfall in the manpower utilisation rate, will further create predictable pressure.
Lack of full manpower utilisation, due to fall in demand of the goods and services. Cause, layoffs n lack of demand in other sectors of the economy, henceforth drastic shift in taste and preferences of the consumers.
Huge initiatives had already been initiated, these all are look over ones, maximum effects will never be seen where intended.
Data Shared about, was significantly higher than last year’s Q2 quarter – around 24 percent. The percent of respondents expecting low or same production is 39 percent in Q2 2021-22, the survey said. The outlook was subdued in the first quarter, owing to the disruption caused by the second wave of COVID.
The overall manufacturing utilisation in manufacturing should be 72 percent in the quarter ending September 30, which is the indication of the recovery in the manufacturing.
These findings are results of the average quarterly survey conducted by the FICCI that accessed the sentiments of the manufacturers from July-September in 11 major sectors- automotive, capital goods, cement and ceramics chemicals, fertilisers and pharmaceuticals, electronics & electrical , metal products, paper products, textiles, textiles machinery, toys and miscellaneous. More than 300 manufacturing units from both large and SME segments with a combined annual turnover of over Rs. 2.7 trillion participated in the survey.
Some of the industrial key areas which are impacting the Indistrial growth are high raw material prices, high cost of finance, uncertainty of demand, shortage of skilled labour and working capital, high logistics cost, excess capacities due to high volume of cheap imports into India, unstable market and high-power tariff are some of the major constraints affecting their expansion plans. Besides uncertainty and lockdowns imposed due to Covid-19 have resumed in low domestic and global demand.
According to the survey, the cost of production as a percentage of sales for manufacturers in the survey has risen for 80 percent of respondents in the second quarter. This is considerably higher than that reported in Q4 2020-21, where 72 percent of respondents recorded an increase in their production costs.
As far as the exports are concerned, the outlook seems to be improving, with around 58 percent of the participants expecting a rise in their outbound shipments during the second quarter. Though 30 percent of the respondent claim that exports would continue on the same path as that of the same quarter in 2020-21. The hiring outlook remained subdued as over two-third of respondents mentioned that they are not likely to hire additional workforce in the next three months. This present a near stable situation in the hiring scenario as compared to the previous quarter of 2021-22, where 69 percent of the respondents maintained similar sentiment.
