Manufacturing Outlook Good but Cost of Business Rising: FICCI Survey

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Manufacturing Outlook Good but Cost of Business Rising: FICCI Survey
Credit: © Reuters.

By Aditya Raghunath -- The latest quarterly survey by FICCI said that the outlook for increased manufacturing activity in Q1 FY22 has improved significantly but that the cost of business and production is increasing. This includes high fixed costs, higher overhead costs, and a reduction in volumes die to lockdown.

Compared to Q1 FY22, manufacturing outlook has improved for Q2. The survey was drawn from over 300 manufacturing units from both large and SME segments with a combined annual turnover of over 2.7 lakh crore

“However, the survey noticed a high percentage of respondents experiencing the rising cost of doing business and production,” it said. “The cost of production as a percentage of sales for manufacturers in the survey has risen for 80% respondents in Q1 2021-22,” Ficci said in its statement. “This is considerably higher than that reported in Q4 2020-21 where 72% respondents recorded an increase in their production costs.”

Export outlook is also improving with around 58% of the respondents saying they expect an increase in the shipments in Q2.

“Hiring outlook for the sector remains subdued as 68% mentioned that they are not likely to hire additional workforce in the next three months,” the survey added.

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  • Sanjay Soni @Sanjay Soni
    Travels Business, car rental business getting unvible due to very High fuel prices. customers paying capacity is very limited.
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