Existing avg capacity utilization of 75% reflects sustained economic activity: Ficci

New Delhi: India’s manufacturing sector is poised for strong growth and expansion, with 87 per cent of re-spondents reporting higher or same production levels for the September quarter, a Ficci survey said.

In comparison, during the first quarter ended June, 77 per cent of respondents reported higher or same production levels. Ficci’s latest quarterly survey assessed the performance and sentiments for July-September 2025-26 of manufacturers in eight major sectors namely, automotive & auto components; capital goods; chemicals, fertilizers & pharmaceutical; electronics; white goods & telecom; machine tools; metal & metal products; textiles, apparels & technical textiles.

The responses have been drawn from manufacturing units from both large and small & medium enterprise (SME) segments with a combined annual turnover of over Rs3 lakh crore. According to the survey, the existing average capacity utilization in manufacturing is close to 75 per cent, which reflects sustained economic activity in the sector.

The future investment outlook is also positive, with over half of the respondents indicating plans for investments and expansions in the next six months. However, challenges faced by respond-ents in expanding capacities include global and geopolitical factors (tariffs, trade restrictions, economic uncertainty), operational issues (labour availability, raw material shortages, regulatory challenges), and others.

In the second quarter, more than 70 per cent of the respondents expect their exports to be higher or at the same level as compared to previous year’s similar quarters, in comparison to about 61 per cent respondents in Q1 FY 2025-26. The average interest rate paid by the manufacturers has been reported to be 8.9 per cent. A little over 81 per cent of respondents reported sufficient availabil-ity of funds from banks during the second quarter for working capital or long-term capital. Nearly 80 per cent respondents mentioned that they do not have any issues with workforce availabil-ity, whereas the remaining 20 per cent feel that there is still lack of skilled workforce available in their sector and there is a need to step up efforts both at government and industry level.