FICCI survey indicates sustained growth and increasing optimism for manufacturing

FICCI's latest Quarterly Survey on Manufacturing indicates a sustained growth and increasing optimism for India's manufacturing sector. In comparison to Q1 FY 2025-26, when 77% of respondents reported higher or same production levels, approximately 87% of respondents reported either higher or same production levels in Q2 FY 2025-26, noted the FICCI Survey. This is one of the highest percentages witnessed in the last many quarters. This optimism is also evident in domestic demand, as 83% of respondents anticipate an increase in orders in Q2 FY 2026 compared to the previous quarter and more so after the latest GST rate cuts announced.

FICCI’s latest Quarterly Survey on Manufacturing (QSM), which is the 67th edition of the survey, assessed the performance and sentiments for Q2 July-September 2025-26 of manufacturers for eight major sectors namely, Automotive & Auto Components, Capital Goods, Chemicals, Fertilizers & Pharmaceuticals, Electronics, White goods & Telecom, Machine Tools, Metal & Metal Products, Textiles, Apparels & Technical Textiles and Miscellaneous. Responses have been drawn from manufacturing units from both large and SME segments with a combined annual turnover of over Rs. 3.0 lakh crores.
The existing average capacity utilization in manufacturing is close to 75%, which reflects sustained economic activity in the sector. The future investment outlook is also positive, with over 50% of respondents indicating plans for investments and expansions in the next six months. In Q1 and Q-2 2025-26, more than 90% of the respondents reported higher or same level of inventory.

In exports, about 61% respondents reported higher or same level of exports in Q1 FY 2025-26 and in Q2 2025-26 more than 70% of the respondents expect their exports to be higher or same as compared to previous year’s similar quarters.

Around 57% of the respondents are looking at hiring an additional workforce in the next three months.

The average interest rate paid by the manufacturers has been reported to be 8.9%. A little over 81% of respondents reported sufficient availability of funds from banks for working capital or long-term capital.

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