Overall capacity utilization in manufacturing still remains low. The average capacity utilization for the manufacturing sector is about 77% as reported in the survey which is same as that of previous quarter. The future investment outlook is also moderate as 65% respondents reported that they are not planning any capacity additions for the next six months. High raw material prices, high cost of finance, excess capacities, uncertainty of demand, availability of land and shortage of working capital are some of the major constraints which are affecting expansion plans of the respondents. In sectors like capital goods, textiles, textiles machinery and chemicals & pharmaceuticals, average capacity utilization has either increased or remained almost same in Q-4 of 2017-18 and Q-1 of 2018-19. In automotive, cement and ceramics, electronics & electricals, leather and footwear, metal and metal products, the capacity utilisation has fallen in Q-4 2017-18 & Q-1 2018-19 vis-à-vis Q-3 2017-18. Table: Current Average Capacity Utilization Levels As Reported in Survey (%) Average Average Average Capacity Capacity Capacity Utilisation in Q-2 Sector Utilisation in Q-4 Utilisation in Q-3 2017-18 2017-18 & Q-1 2017-18 2018-19 Automotive 73 78 79 Capital Goods 74 70 70 Cement and 70 73 75 Ceramics Chemicals & 84 78 79 Pharmaceuticals Electronics & 76 65 70 Electricals FMCG NA NA 78 Leather & 70 75 55 Footwear Metals & Metal 75 81 80 Products
Overall capacity utilization in manufacturing still remains low. The average capacity utilization for the manufacturing sector is about 77% as reported in the survey which is same as that of previous quarter. The future investment outlook is also moderate as 65% respondents reported that they are not planning any capacity additions for the next six months. High raw material prices, high cost of finance, excess capacities, uncertainty of demand, availability of land and shortage of working capital are some of the major constraints which are affecting expansion plans of the respondents. In sectors like capital goods, textiles, textiles machinery and chemicals & pharmaceuticals, average capacity utilization has either increased or remained almost same in Q-4 of 2017-18 and Q-1 of 2018-19. In automotive, cement and ceramics, electronics & electricals, leather and footwear, metal and metal products, the capacity utilisation has fallen in Q-4 2017-18 & Q-1 2018-19 vis-à-vis Q-3 2017-18. Table: Current Average Capacity Utilization Levels As Reported in Survey (%) Sector Average Capacity Utilisation in Q-4 2017-18 & Q-1 2018-19 Average Capacity Utilisation in Q-3 2017-18 Average Capacity Utilisation in Q-2 2017-18 Automotive 73 78 79 Capital Goods 74 70 70 Cement and Ceramics 70 73 75 Chemicals & Pharmaceuticals 84 78 79 Electronics & Electricals 65 76 70 FMCG NA NA 78 Leather & Footwear 70 75 55 Metals & Metal Products 75 81 80