New Delhi, Mar 13 (KNN) There are signs that cost pressure witnessed in the last many months seems to be softening a bit for the manufacturing sector with growth expected to continue for Indian manufacturing sector in Jan-March Q4 2022-23, said the latest FICCI Manufacturing Survey released on Monday.

The report reveals that after experiencing revival of Indian economy in the FY 2021-22, momentum of growth has continued for the subsequent quarters of FY 2022-23 with some temporary effect of global slowdown on Indian manufacturing.

In the Q3 Oct-Dec FY 2022-23, 58 per cent of the respondents reported higher production levels. Growth outlook continues, though lower sequentially.

Further, around 50 per cent of the respondents expect a higher level of production in Q4 Jan-Mar 2022-23 with an average increase in production in double digits.

This assessment is also reflective in order books as 52 per cent of the respondents in Q-3 Oct-Dec 2022-23 have had higher number of orders and demand conditions continue to be optimistic in Q-4 too.

There seems to be some softening of cost pressures on manufacturers in Q4, notes FICCI survey.

The cost of production as a percentage of sales for manufacturers in the survey has risen for 73 per cent respondents, which is lower than 94 per cent as reported in previous survey.

Nonetheless, high raw material prices especially that of steel, increased transportation, logistics and freight cost, and rise in the prices of crude oil and fuel have been the main contributors to increasing cost of production.

Other factors responsible for escalating production costs include enhanced labour costs, high cost of carrying inventory, and fluctuation in the foreign exchange rate.

FICCI’s latest quarterly survey assessed the sentiments of manufacturers for Q4 Jan-March (2022-23) for eleven major sectors namely Automotive & Auto Components, Capital Goods, Cement, Chemicals and Pharmaceuticals, Electronics, Machine Tools, Metal & Metal Products, Paper Products, Petrochemicals & Fertilizers, Textiles, Apparels & Technical Textiles, Textile Machinery and Miscellaneous.

Responses have been drawn from over 400 manufacturing units from both large and SME segments with a combined annual turnover of over Rs 10 lakh crore.  (KNN Bureau)