Industries running below capacity
A Bangladesh Bureau of Statistics (BBS) study shows that the industry's inability to fully utilise its capacity is preventing it from contributing to the economy at the desired level. In fact, about one-third of the manufacturing units can utilise between 25 to 50 per cent of their total capacities, while 59 per cent can use 75 per cent of their potential. Given that manufacturing makes the highest contribution to the nation's Gross Domestic Product (GDP) after the service sector, the issue of underutilized capacity needs to be addressed in earnest.
A former president of readymade garment (RMG) sector's apex body BGMEA, which represents more than one third of the total number of industrial units, thinks political instability coupled with power and fuel crisis are to blame for the situation. It's hardly surprising that many of these industries are resorting to job cuts or running the units below their actual capacities.
Some experts, on the other hand, maintain the industry is utilizing two-thirds of its capacity and would rather like to give credit to it for its double-digit contribution to the GDP. And this is despite the fact that the pace of investment in the economy is rather slow.
Differences in expert opinion apart, the fact remains that the manufacturing sector which has seen a phenomenal expansion between 2001 and 2010 has been facing problems. Obviously, the existing infrastructure will have to be bolstered to step up industrial growth.
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