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Export Demand Remains Subdued For Textiles And Apparel Industry: Report
The survey highlights that there has been an escalation in labour charges coupled with the lack of availability of skilled labour
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Export demand remains subdued for the textiles and apparel industry and about 39 per cent of the respondents are expecting their export levels to be the same in Q4 2022- 23, said FICCI in the quarterly survey on the Indian manufacturing sector.
On the exports front, around 33 per cent of the respondents reported higher exports in Q3 FY 22- 23.
Unavailability of raw materials, supply chain disruptions caused due to Covid-19 and Russia-Ukraine war and Consignments stuck at ports are significant constraints faced by the sector.
"Another constraint faced by the sector is the lack of availability of credit and finance at feasible rates," as per the survey.
Interestingly, about 67 per cent of the respondents reported a rise in the cost of production.
"This has been attributed majorly to increasing cost of raw materials such as cotton, petrochemical derived products, dyes, chemicals, certain fibres etc," it added.
The survey also highlighted that there has been an escalation in labour charges coupled with the lack of availability of skilled labour.
It added, "High capital costs include higher costs of spares and machinery maintenance along with the increase in administrative costs."
Also, on average, the sector is utilising over 73 per cent of its capacity, which is higher than last year as reported by the respondents. Over 44 per cent of the respondents reported that they are planning to expand capacity in the next 6 months, it added.
Over 55 per cent of the respondents mentioned that their production for Q3 October to December 2022-23 was at a higher level as compared to the same quarter last year.
Moreover, 44 per cent of the respondents are expecting a higher level of production for Q4 Jan-March 2022-23 as compared to Q4 FY 2021-22.
Over 61 per cent of the respondents are expecting higher order levels for Q4 FY 22-23 as compared to Q3 FY 22-23, as per the survey.
Meanwhile, the growth rate of the manufacturing sector is likely to be sustained in the next three to six months as per the survey respondents.