Federation of Indian Chambers of Commerce and Industry OR FICCI’s latest Quarterly Survey on Manufacturing (QSM) was unveiled today. It assessed the performance and sentiments of manufacturers for Q3 Oct-Dec 2024-25 for eight major sectors namely, Automotive & Auto Components, Capital Goods, Chemicals, Fertilizers & Pharmaceuticals, Electronics & Electricals, Machine Tools, Metal & Metal Products, Textiles, Apparels & Technical Textiles and Miscellaneous. Responses have been drawn from manufacturing units from both large and SME segments with a combined annual turnover of over Rs. 4.7 lakh crores.
The survey indicates sustained growth and increasing optimism for India's manufacturing sector. In comparison to Q3 FY 2024, when 73% of respondents reported higher production levels, approximately 83% of respondents reported either higher or same production levels in Q3 FY 2025. Domestic demand conditions show optimism in Q3 2024-25. This assessment of Indian manufacturing is also reflected in the higher order books. 83% of the respondents are expecting a higher number of orders in Q3 FY 25 compared to the previous quarter.
FICCI noted that the existing average capacity utilization in manufacturing is around 75%, which reflects sustained economic activity in the sector. The future investment outlook is also positive, with 42% of respondents indicating plans for investments and expansions in the next six months. In Q3 2024-25, more than 75% of the respondents are expecting higher or same level of inventory. In exports, about 65% respondents reported higher exports in Q2 FY 2024-25 and in Q3 2024-25 more than 70% of the respondents expect their exports to be higher as compared to previous year’s similar quarters.
The survey highlighted that 35% of the respondents are looking at hiring an additional workforce in the next three months. The average interest rate paid by the manufacturers has been reported to be 9.5%. A little over 80% of respondents reported sufficient availability of funds from banks for working capital or long-term capital.
Meanwhile, Production costs for manufacturers in Q3 FY 2025 seem to remain on higher side. Nearly 60% of respondents reported an increase in the cost of production as a percentage of sales, which is consistent with the previous quarter’s findings, indicating that costs are still on the higher side. The increase in production costs compared to last year is primarily driven by rising raw material prices, particularly for materials like iron/steel, rubber, carbon, and chemicals such as ethylene oxide and caustic soda.