Manufacturing sector still buoyant: CII-Ascon Survey for Q1 FY09

New Delhi, Aug 3 (UNI) A CII-Ascon survey for the period April-June 2008 on performance of the various manufacturing sectors shows that almost half of the sectors are in the excellent and high growth category, but there is cause for concern as the number of sectors reporting negative growth has increased.

However, the survey said the increase in the interest rates following the announcement of the monetary policy is also likely to impact the overall manufacturing growth.

Out of a total of 100 sectors reporting production, seven sectors reported excellent growth rate of more than 20 per cent, while 40 sectors recorded high growth rate of 10-20 per cent.

The 32 sectors recorded a moderate growth rate of less than 10 per cent and 21 sectors recorded negative growth rate.

The survey shows that percentage has gone down for excellent and moderate growth, while there is increase in the sectors in high growth category from 30.7 per cent to 40 per cent.

The survey also shows increase in the percentage of sectors in negative category from 16.35 per cent to 21 per cent for the period April-June 2008.

According to the release, issued by CII, industry has to find ways to cope with this difficult situation on account of soaring input prices and increasing interest rates. ''It is important that non-fiscal initiatives by government be taken up at the earliest to keep up the investment pipeline. This is the right time to take initiatives that would de-botteneck the supply side,'' it said.

According to the survey, sectors showing excellent growth includes LLDPE, PVC, Power Cables and Rubber Footwear, while sectors reporting high growth includes Polymers, Capacitors, Circuit Breakers, Industrial Valves, Power Transformer, Transmission Line Towers, Electrical Fans and industrial gases like Argon, Carbon Dioxide, Hydrogen, Nitrogen, and Oxygen.

The sectors like cement, Motor Starters, Aluminium Extrusions, Machine Tools, Transformer, Ball and roller Bearings, Audio Products, Washing Machines, Clocks, Rubber Conveyor Belting, Automotive Tyre, Groundnut Oil, Sunflower oil and Vehicle Industry including LCVs, Scooters, were all in the moderate growth category.

Fertiliser, Distribution Transformer, Textile Machinery, Mopeds, All Three Wheelers, Electric Two wheelers, Rubber Hoses and Edible Oils reported negative growth.

CII Director General Chandrajit Banerjee said, ''it could be seen that there is increase in percentage of sectors in the high growth from 30.7 per cent to 40 per cent, if compared to the last survey.

This is a positive development. It reflects that industry is learning to cope with the difficult situation emerging out of high interest costs and spiralling input prices.'' However, he said, the emerging situation needs to resolve itself soon since industry has only limited capacity to keep absorbing these cost escalations.

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