The growth expectations for the first quarter (Q1) in fiscal 2022-23 (FY23) for the Indian textiles sector are strong compared with Q1 FY22, according to the latest quarterly survey on the manufacturing sector done by an industry body. The average capacity utilisation of the sector in Q4 FY22 was 82 percent. The outlook for exports in general seems to be positive. Based on expectations in different sectors, barring a few, almost all sectors are likely to register moderate to strong growth in Q1 FY23.
After a revival of Indian manufacturing in the first three quarters of FY22, the momentum of growth continued in Q4 of the same fiscal and Q1 of FY23, and there seems to be an improvement in employment outlook after a long gap. The survey found 53.4 percent of the respondents expect an average increase of 15.2 percent in exports in Q1 FY23 compared to Q1 FY22.
The survey by the Federation of Indian Chambers of Commerce and Industry (FICCI) noted that 54.8 percent respondents reported higher production levels in Q1 FY23, with an average expectation of increase in production by over 10 percent. The survey found an improvement in employment creation by the sector as compared to the previous quarter (Q3 FY22).
The existing average capacity utilisation for Q4 FY22 in manufacturing is 77 percent, a little higher than 75 percent in the previous quarter, which reflects increased economic activity in the sector. The future investment outlook also improved as compared to previous quarters but remains that of cautious optimism, as 40 percent respondents reported plans for capacity additions in the next six months, by 14 percent on an average, FICCI said.
Eighty percent of the respondents expect either more or same level of inventory in Q1 FY23, which is a bit lower compared to the previous quarter, where around 90 percent respondents expected either more or same level of inventory.
