New Delhi, May 6 (IANS) India’s manufacturing sector reported sustained growth and rising optimism in Q4 FY26 even as input costs climbed, a report said on Wednesday.

The report from FICCI said that its Manufacturing Survey found 93 per cent of respondents saying production was higher or flat, compared to 91 per cent in the previous quarter.

This optimism was also evident in domestic demand, as 89 per cent of respondents anticipated higher or same orders in Q4 FY 2026 compared to the previous quarter.

Responses were collected on expectations of both large and MSME manufacturers across eight major sectors with a combined annual turnover of over Rs. 8 lakh crore and the findings reflected the overall positive sentiments and strong domestic fundamentals for manufacturing growth.

The report said that capacity utilisation eased slightly to about 72 per cent on average, with sectoral averages ranging from roughly 65 per cent in miscellaneous category to about 76.4 per cent in textiles, apparels and technical textiles.

However, the future investment outlook is steady for the next six months.

Around 89 per cent of the respondents reported a higher or same level of inventory in Q3 FY26, while in Q4 FY26, around 86 per cent of the respondents are expecting a higher or same level of inventory.

About 74 per cent of respondents reported a higher or same level of exports in Q3 FY26, while in the fourth quarter around 80 per cent of the respondents expect their exports to be higher or flat compared to previous year’s similar quarters.

Hiring intentions strengthened modestly, with 41 per cent of respondents planning to add staff in the next three months, up from 38 per cent in the prior quarter.

The report flagged rising production costs, with nearly 70 per cent of firms reporting an increase in cost of production as a percentage of sales, up from 57 per cent in the previous quarter.

The rise in production costs is driven by higher raw material prices, currency depreciation and increased logistics, power and utility costs.

Around 79 per cent respondents mentioned that they do not have any issues with workforce availability, while 21 per cent felt that they lacked skilled workforce available in their sector

—IANS

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