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Jobs outlook looks muted in manufacturing sector: FICCI survey

W ith less than a year to go for Lok Sabha elections, a Federation of Indian Chambers of Commerce and Industry (FICCI) survey of 300 manufacturing units across eleven sectors paints a subdued picture for the manufacturing sector.
Industry body, FICCI, in its quarterly manufacturing survey paints a grim picture-production outlook for April to June is weaker than the last quarter of 2017-2018.
Output growth has slipped and 49 per cent of the respondents are expecting higher number of orders as against 51 per cent in January-March 2018. Capacity utilization continues to be low- the average capacity utilization at 77 per cent is not encouraging and doesn’t augur well for investment growth and expansion.
Private sector investment continues to be a drag with nearly 65 per cent of the respondents reporting that they do not plan to expand capacity for the next six months. High cost of raw materials, expensive finance, excess capacities, uncertainty of demand, availability of land and shortage of working capital continues to plague the manufacturing sector, according to the survey.
Most strikingly, in most employment generation sectors – textiles, capital goods, textiles machinery, pharmaceuticals -capacity utilization has remained the same or fallen -while in sectors such as automobiles, cement, leather and footwear, metal and metal products -capacity utilization has fallen.
The silver lining, however, is that the appreciating rupee has given the much needed push to exports. 44 per cent of the participants expect a rise in exports.
What should be most worrying is the bleak hiring trend- with nearly 69 per cent of respondents saying that they are not likely to hire additional workforce in the next three months.