New Delhi, April 10 (IANS) The manufacturing sector is likely to witness a slight decline in the January-March quarter of 2016-17 on increased cost of production, an industry body said on Monday.
“The latest quarterly survey reported a decline in the outlook for the sector for Q4 of 2016-17 due to rising cost of production which has impacted the competitiveness of the sector in the last few months,” the Federation of Indian Chambers of Commerce and Industry (Ficci) said in its survey here.
The cost of production as a percentage of sales for manufacturers in the survey has risen significantly as 60 per cent respondents reported cost escalation. This is primarily due to rise in minimum wages and raw material cost.
Ficci’s latest quarterly survey assessed the expectations of manufacturers for Q4 for twelve major sectors namely auto, capital goods, cement and ceramics, chemicals, electronics and electricals, food products, leather and footwear, machine tools, metal and metal products, paper products, textiles and technical textiles and textiles machinery.
Responses have been drawn from 320 manufacturing units from both large and small and medium-sized enterprises (SME) segments with a combined annual turnover of over Rs 3.8 lakh crore.
Hiring outlook remains subdued in manufacturing in coming months as 77 per cent of the participants said that they are unlikely to hire additional workforce in next three months.