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Modest revival in manufacturing sector ahead: FICCI

business Updated: Apr 09, 2012 01:14 IST

India's manufacturing sector is projected to show a modest growth rate during January-March quarter of 2011-12 on the back of higher book orders and a better export outlook, according to a survey.

Industry body FICCI, in its latest quarterly survey, said 36% of the 336 manufacturing units and associations that participated in it expect growth to revive in the last quarter.

The survey "projects a revival in the growth of the manufacturing sector in the fourth quarter of 2011-12 after the sector's growth almost bottomed out in the third quarter. However, the growth is expected to be modest".

"The revival is a result of higher orders on the books and a somewhat better export outlook," it said.

Output of the manufacturing sector, which constitutes over 75% of the index of industrial production (IIP), rose 8.5% in January, compared to 8.1% in the same month last year.

About 58% respondents said rising cost of raw materials was a major constraint for growth in the sector.

It said there is an improvement in demand conditions for the manufacturing sector in the last quarter as compared to the previous quarters.

"Growth of manufacturing exports was expected to be better in Q4 as against previous quarter," it said.

About 44% participants said their capacity utilisation during the period under review was higher than last year.