Manufacturing recovering fast, says CII Survey
India’s manufacturing sector shows signs of revival and is in on the higher growth trajectory in the first half of the current fiscal (April-September 2009). This has been revealed by the latest comprehensive CII m-ASCON survey undertaken by the Confederation of Indian Industry (CII) for the period April-September 2009 over April-September 2008.
Out of the 100 sectors surveyed, ten sectors have registered excellent growth of more than 20% in April-September 2009 compared to April-September 2008. Sectors reporting excellent growth rates are nitrogen gas, phosphate, motor starters, argon, industrial gasses, nitrogen, oxygen, earth moving and construction equipment and multi purpose vehicles (MPVs), etc.
The CII Survey findings show that growth rates in the majority of the sectors covered show positive growth trends during April-September 2009 which is an improvement from the trends observed in April-September 2008 and reversal from those observed in April 2008-March 2009. There is also a discernible shift in the growth trends from negative and moderate growth category to high and excellent growth category in respect of about 12% of the sectors in April-September
2009 from April-March 2008- 2009.
The survey further reveals that the buoyant manufacturing growth in the first half of 2009-10 over the corresponding period of the last year is led by rise in production of basic, intermediate and consumer durables.
26 sectors have recorded high growth of 10-20% in April-Sept 2009 compared to 27 sectors in April-Sept 2008. Some of these are aluminum, cement, fertilizers, paints, polymers like PS, circuit breakers, gases like carbon dioxide & hydrogen, refractories, pumps, light commercial vehicles (LCVs), cars, scooters, mopeds, motor cycles, other consumer durables like consumer electronics and home appliances.
37 sectors have registered moderate growth of 0-10% in April-Sept 2009 compared to 43 sectors in April-Sept2008. These include crude oil, diesel, LPG, Nitrogen fertilizer, plastics, refinery, soda ash, power cables, capacitors, auto components, personal computers, ceramics, electronic components, industrial valves, synthetics like PSF & PFY, oil & gas equipment, transmission line towers, three wheelers, automotive tyres, glass products, paper & newsprint, etc.
However, some sectors continue to report negative growth during Apr-Sept 2009 including caustic soda, cold rolled steel strips, lead & lead alloy, polymers like HDPE, LDPE LLDPE, PP& PVC, sponge iron, switch gears, energy meters, abrasives, ball & roller bearings, fluid power, electric motors, machine tools, power transformers, textile machinery, M&HCVs, tea, edible oils like groundnut , soya and sunflower, etc.
The survey also identified some general and sector specific issues of concern to the manufacturing industry. The issues highlighted include reduced demand due to general slowdown, infrastructural bottlenecks, higher interest rate, inadequate availability of credit, fluctuations in the exchange rate of rupee against other currencies and cheap imports from China in respect of a number of products. Ensuring speedier implementation of ongoing and already announced projects, improving regulatory environment, ensuring timely availability of credit and directing banks to provide easier and cheaper credit especially for SMEs are vital to enable the industry to achieve lower cost, improved quality and better performance for higher manufacturing growth.