The findings of the Bi-annual Industry Monitor Survey conducted by Confederation of Indian Industry (CII) - Southern Region for October 2007-March 2008, reveal an impressive growth in electronics and steel in Karnataka. CII's Industry Monitor Survey the five Southern States of Andhra Pradesh, Karnataka, Kerala, Pondicherry and Tamil Nadu was carried out with the objective of analysing the performance of top five sectors in each of these States during October - March of the financial year 2007-08, providing an outlook for April 2008-September 2008 and identifying the issues and concerns for key sectors. The survey captured the views of the senior executives of the leading companies in each of these five sectors. The top five sectors for the survey were identified on the basis of their contribution to State Gross Domestic Product (SGDP). The key sectors that contributed to the Karnataka's economy are automotive and auto components, electronics, information technology, engineering and steel.

The electronics industry improved its performance during October 2007 - March 2008. Compared to April 2007 - September 2007, the production increased by 10-20% and sales by 10-15%. Both the capacity utilisation and the production value went up by 10-15%. However, pricing, profit margin and employment levels remained unchanged. The industry leaders foresee a better performance during April 2008 - September 2008.  It expects an increase in demand of 15-20%, which in turn is expected to increase the production and sales by 15%. The capacity utilisation would increase by 15%. The industry expects the production value to rise up to 15%.  The rising raw materials price, its inadequate availability and the expectation of further price rise are major issues that hamper electronics industry's growth. The industry leaders expressed their concerns over the lack of availability of skilled manpower. The industry leaders suggested for removal of CST forms and bring uniform taxation policy through out India.

The steel industry of Karnataka witnessed good performance during October 2007-March 2008. Compared to April 2007-September 2007, the sales, capacity utilisation and production value increased by 10%. The inventory increased by 8%. Though the prices levels remained the same, the profit margins came down by 3%. The steel industry is likely to register a decline in its performance during April 2008 - September 2008. The industry predicts a 15% decline in sales, capacity utilisation, production value. The inventory levels may come down by 12%. The industry does not expect any change in product pricing, but predicts a decline of 3% in its profit margins. The rising cost of raw materials is a major issue for the industry. The rise in cost of raw materials like iron ore, imported coking coal, melting scrap and the rise in freight cost are some of the key concerns of the steel industry.

The industry is likely to witness mixed performance trends during April 2008-September 2008. It predicts 12-15% decline in the industry production. The sales are expected to grow by 10-15%. However, the capacity utilisation and inventory are likely to remain unchanged. The performance indicators of Karnataka's automobile and auto components industry reveal a mixed trend during October 2007-March 2008, as compared to April 2007-September 2007. Both the production and sales went up by 5-10%. Though the production value and prices increased by 6-9%, the profit margins decreased by 3%. The industry is expecting a near stagnant performance in most of the parameters during April 2008-September 2008. It expects the demand to go up by 15-25%. However, other parameters such as capacity utilisation, production value, inventory levels, pricing, profit margins and employment are expected to remain unchanged.

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