The survey also revealed that 87 per cent of the respondents plan to increase investments during October – March 2007-08. Capacity utilization across the board has increased and 59% of the respondents have revealed that capacity utilization for October–March 2007-08 would be in the range of 75-100 per cent.
While expectations on capacity utilisation are normal, inventory levels are on higher side. The CII survey revealed that 45% of the respondents expect the inventory levels to increase. Though this is marginally better than the previous survey, overall higher inventory level indicates signs of declining demand especially in consumer durables sector.
The value of production is also expected to increase in the next six months. This was revealed by 82 per cent of the respondents. In fact, for 66 percent of the respondents production increased in the first half of 2007-08. Further increase in production is likely because of expected increase in new orders.
The second half of 2007-08 is expected to be better in terms of increase in new orders as 75 per cent of the respondents expected new orders to increase in the next six months, while about 61 per cent of the respondents revealed that new orders had increased in the first half of 2007-08.
Keeping in line with expected increase in production, employment is also expected to increase in the second half of this financial year. This was revealed by 51% of the respondents, who expected employment to increase during October–March 2007-08. According to the CII survey employment had increased during the period April–September 2007-08 as revealed by 51% of the respondents.
On exports, 67% of the respondents expressed confidence in exports expansion for the period October-March 2007-08. While 53% of the respondents revealed that exports had increased during April-September 2007-08, 88% of the respondents felt that the procedural delays have not reduced.
This has been a long-standing hurdle for exporters, which raises transactions costs and needs to be addressed urgently. More importantly 87% of the respondents don't see any change to be happening on procedural delays for the period of October-March 2007-08.
Confederation of Indian Industry
marketing@alchempro.com
