Around 41% of the respondents in the survey covering over 300 manufacturing units, with a combined annual turnover of over 3.5 lakh crore, expect higher production during the June quarter — a 13 percentage point drop since the March-quarter.
During the first quarter of the current financial year, 36% of the respondents are expecting higher number of orders, against 44% in the fourth quarter of the last financial year, the survey released on Sunday showed.
Of the 12 sectors covered by the survey, auto, metals, medical devices and leather and footwear were seen to be most pessimistic and pointed to low growth expectations. In contrast, electronics and electricals were bullish on growth, while textiles, chemicals, fertiliser and pharma, capital goods, paper, textiles machinery, cement and ceramics expected moderate growth.
In one of the few positive signs, the survey indicated, interest rates have begun to come down. “Average interest rate paid by the manufacturers has slightly decreased to 9.9% a year as against 10.3% during the last quarter, but the highest rate remains as high as 14%. The recent cut in repo rate by the RBI should come as a relief for the industry if banks pass it on and respondents expect more reduction in the rates in coming months to drive investments,” Ficci said.