Quarterly Order Books, Inventories and Capacity Utilisation Survey: October-December 2011 (Round 16)*
This article, third in the series, presents the findings
of Order Books, Inventories and Capacity Utilisation
Survey (OBICUS) conducted for Q3:2011-12, the 16th round in the series. During Q3:2011-12, new orders of
respondent companies increased by 10.6 per cent over that
in the previous quarter which is reflected in increased level
of capacity utilisation (CU). Both finished goods inventory
to sales ratio and raw material to sales ratio declined.
I. Introduction
The Reserve Bank of India has been conducting
Order Books, Inventories and Capacity Utilisation
Survey (OBICUS) on a quarterly basis. The survey
captures the movements in order books, inventories
and capacity utilisation which are important indicators
of economic activitiy, inflationary pressures and overall
business cycle and as such, are useful for assessing the
consumption and investment demand outlook. The
survey1 captures quantitative data on new orders
received during the reference quarter, backlog orders
at the beginning of the quarter, pending orders at the
end of the quarter, total inventories with breakup of
work-in-progress and finished goods inventories at the
end of the quarter and item-wise production in terms
of quantity and values during the quarter vis-à-vis the
installed capacity from a targeted group of manufacturing
companies. The level of capacity utilisation is derived
from the data provided by companies as per the selected
methodology. The survey is canvassed among 2,500
public and private limited companies in the
manufacturing sector with a good size/industry
representation. Trend analysis is done to study the
movements in inventories, order books and capacity
utilisation based on a common set of companies in each
round to facilitate better comparability of data over the
reference quarters. The common set of companies may
vary to some extent across the survey rounds depending
upon the response pattern in each survey round.
II. Sample Composition and Response to the Present Survey
In all, 1,207 companies participated in the survey
for the quarter October-December 20113. Of these, 49
are government companies, 302 are non-government
private limited and 856 are non-government public
limited companies. The analysis is based on the data
provided by these companies for last 13 quarters i.e.,
Q3:2008-09 to Q3:2011-12. The data tables are given in
Annex.
III. Findings of Survey
III.1 Order Books
Average new orders of respondent companies,
increased by 10.6 per cent in the current quarter over
that in the previous quarter and by 18.7 per cent over
the new orders received in the same quarter a year ago.
(Chart 1, Table 1).
III.2 Capacity Utilisation (CU)
In line with higher new orders, CU of respondent
companies at overall level increased to 75.9 per cent in
Q3:2011-12 from 73.9 per cent in the previous quarter.
However, the current level of CU is still below the peak
observed during Q4:2010-11. The movement of CU is
in tandem with the Index of Industrial Production (IIP)
for manufacturing sector (Chart 2, Table 2).
III.3 Inventories
During Q3: 2011-12, the average total inventory
of respondent companies grew by 5.4 per cent over the
previous quarter, whereas the average finished goods
(FG) inventory increased by 7.7 per cent. Total inventory
to sales ratio declined to 44.6 per cent at the end of
Q3:2011-12. Raw material (RM) inventory to sales ratio
at 21.1 per cent was at the lowest level in last 13
quarters under review. FG inventory to sales ratio which
was at an elevated level in the previous two quarters,
also declined in Q3:2011-12 (Chart 3, Table 3).
IV. Conclusion
Based on various parameters viz., new orders
growth, level of capacity utilisation and finished goods
inventory to sales ratio, the survey results indicate
slight improvement in demand condition. Level of
capacity utilisation (CU) increased over previous quarter, but was well below the peak level achieved in
Q4:2010-11.
Annex – Data Tables
Table 1: Order Books (Q3: 2008-09 to Q3: 2011-12) |
Quarter |
Amount in ` billion |
Quarterly growth (%) |
Avg Backlog
Order |
Avg New
Order |
Avg Pending
Order |
Avg Backlog
order |
Avg New
Order |
Avg Pending
Order |
Q3:2008-09 |
1.45 |
0.69 |
1.38 |
– |
– |
– |
Q4:2008-09 |
1.40 |
0.75 |
1.37 |
-3.7 |
8.1 |
-0.9 |
Q1:2009-10 |
1.38 |
0.79 |
1.40 |
-1.3 |
5.3 |
1.9 |
Q2:2009-10 |
1.40 |
0.84 |
1.41 |
1.7 |
7.3 |
1.1 |
Q3:2009-10 |
1.43 |
0.86 |
1.38 |
1.9 |
1.8 |
-2.4 |
Q4:2009-10 |
1.40 |
0.99 |
1.35 |
-2.0 |
14.8 |
-1.9 |
Q1:2010-11 |
1.36 |
0.90 |
1.36 |
-3.1 |
-8.9 |
0.3 |
Q2:2010-11 |
1.37 |
0.96 |
1.40 |
0.9 |
7.3 |
3.5 |
Q3:2010-11 |
1.42 |
1.05 |
1.45 |
3.7 |
9.6 |
3.1 |
Q4:2010-11 |
1.47 |
1.20 |
1.47 |
3.6 |
14.1 |
1.9 |
Q1:2011-12 |
1.49 |
1.04 |
1.49 |
1.6 |
-13.4 |
1.3 |
Q2:2011-12 |
1.51 |
1.13 |
1.51 |
1.1 |
8.7 |
1.0 |
Q3:2011-12 |
1.52 |
1.25 |
1.59 |
0.8 |
10.6 |
5.6 |
Table 2: Capacity Utilisation & Index of Industrial Production (Manufacturing) (Base: 2004-05) |
Quarter |
Q3:
2008-09 |
Q4:
2008-09 |
Q1:
2009-10 |
Q2:
2009-10 |
Q3:
2009-10 |
Q4:
2009-10 |
Q1:
2010-11 |
Q2:
2010-11 |
Q3:
2010-11 |
Q4:
2010-11 |
Q1:
2011-12 |
Q2:
2011-12 |
Q3:
2011-12 |
CU |
71.5 |
74.6 |
69.9 |
76.1 |
78.8 |
79.0 |
74.5 |
75.7 |
75.9 |
79.9 |
74.9 |
73.9 |
75.9 |
IIP MFG |
152.6 |
151.7 |
149.9 |
158.1 |
162.0 |
175.1 |
165.4 |
169.8 |
176.8 |
190.7 |
178.2 |
175.5 |
178.6 |
Table 3: Average Sales and Inventories and their ratios (Q3: 2008-09 to Q3: 2011-12) |
Quarter |
Amount in ` billion |
Ratio (%) |
Avg Sales |
Avg Total
Inv |
Avg FG
Inv |
Avg WiP
Inv |
Avg RM
Inv |
Total Inv/
Sales |
FG Inv/
Sales |
RM Inv/
Sales |
Q3:2008-09 |
2.35 |
1.25 |
0.42 |
0.17 |
0.65 |
53.1 |
18.0 |
27.7 |
Q4:2008-09 |
2.26 |
1.17 |
0.38 |
0.18 |
0.61 |
51.8 |
16.7 |
27.1 |
Q1:2009-10 |
2.31 |
1.26 |
0.40 |
0.19 |
0.66 |
54.4 |
17.5 |
28.4 |
Q2:2009-10 |
2.63 |
1.35 |
0.48 |
0.21 |
0.66 |
51.3 |
18.3 |
25.0 |
Q3:2009-10 |
2.89 |
1.39 |
0.46 |
0.21 |
0.71 |
48.1 |
16.0 |
24.7 |
Q4:2009-10 |
3.13 |
1.47 |
0.48 |
0.21 |
0.78 |
47.0 |
15.3 |
25.0 |
Q1:2010-11 |
3.00 |
1.54 |
0.53 |
0.23 |
0.77 |
51.2 |
17.7 |
25.7 |
Q2:2010-11 |
3.17 |
1.63 |
0.57 |
0.26 |
0.80 |
51.4 |
18.1 |
25.3 |
Q3:2010-11 |
3.36 |
1.71 |
0.58 |
0.27 |
0.86 |
50.8 |
17.2 |
25.5 |
Q4:2010-11 |
3.88 |
1.84 |
0.62 |
0.29 |
0.94 |
47.6 |
15.9 |
24.2 |
Q1:2011-12 |
3.83 |
1.93 |
0.68 |
0.29 |
0.96 |
50.3 |
17.7 |
24.9 |
Q2:2011-12 |
3.98 |
1.94 |
0.71 |
0.31 |
0.92 |
48.7 |
17.9 |
23.0 |
Q3:2011-12 |
4.58 |
2.04 |
0.77 |
0.31 |
0.97 |
44.6 |
16.8 |
21.1 |
Note: Based on 933 common companies which reported the data for last 13 quarters.
FG: Finished Goods. Wip: Work in Progress. RM: Raw Material. |
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