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Industry faces hike in raw material cost: NCAER

Written by: Staff

New Delhi, Apr 15: Rising interest rates and commodity prices have pushed up the cost of raw material for a host of ndustries and the trend is likely to continue in the next six months in 2006, an NCAER survey has said.

''More firms opined that the cost of raw materials per unit of output has increased in the last three months. This trend is observed across all sectors except the services sector,'' the Quarterly Review 2006 of the National Council of Applied Economic Research (NCAER) said in its latest edition.

The increase, among raw materials, has been noticed in the cost of electricity and fuel per unit of output.

As a result of the economy remaining high on the growth path in the last couple of years, more firms expect the import of raw material to increase in the coming six months, the Survey said.

''At the aggregate level, after a gap of three previous rounds, 5.7 per cent more firms opined that their import of raw materials would increase in the next six months,'' it said.

The NCAER review showed that with continuation of the trend observed in the last few rounds of surveys, a higher proportion of firms are having lower level of orders. At the aggregate level, in this round, 3.4 per cent more firms have sales order of less than one month. Compared to the previous round, proportion of firms holding one to three months and more than three months orders declined by 2.3 per cent and 1.2 per cent respectively, in this round.


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