Majority of the Micro, Small and Medium-scale Enterprises (MSMEs ) in the manufacturing and service sectors have seen an improvement in capacity utilisation in the first quarter of 2025-2026 compared with the previous quarter.
According to the third edition of the “MSME Outlook Survey” released by the Small Industries Development Bank of India (SIDBI) on Wednesday capturing the perspectives of 1,200 MSMEs operating across manufacturing, services, and trading sectors, nearly a fifth of the respondents reported above normal capacity utilisation level, for both manufacturing and services sector enterprises. This momentum is expected to continue, with nearly 29% of respondents projecting an increase in capacity utilisation in the next year.
While 12 % of the respondents reported increase in capacity utilisation in the manufacturing sector during the last quarter of FY 25, 21 % reported an increase in the first quarter of the current fiscal.
Access to finance has improved, with 88% of the MSMEs confirming the availability of overall finance, which is an increase from 79% in the previous survey. With increased sales, capacity utilisation, and input costs, there is now greater potential for expanding formal credit to support the sector’s financing needs. The MSMEs nevertheless, remain concerned about the high cost of finance, according to the report.
Further, the Composite MSME Business Confidence Index (M-BCI) for the first quarter of 2025-2026 (April–June) rose to 63.75 from 60.82 in the previous quarter. This uptick reflects a favourable business environment for MSMEs, the report said.
Access to finance has improved, with 88% of the MSMEs confirming the availability of overall finance, which is an increase from 79% in the previous survey.
| Photo Credit:
JOTHI RAMALINGAM B
In terms of sales performance, more than half of the MSMEs in the manufacturing and trading sectors reported growth and in the services sector, 42% of MSMEs recorded sales growth, while another 48% reported stable sales.
Published – July 30, 2025 08:27 pm IST