The 36th round of the Order Books, Inventories and Capacity Utilisation Survey (OBICUS) was conducted by the Reserve Bank of India for the quarter October-December, 2016 with responses from 710 companies1 providing a snapshot of demand conditions facing the Indian manufacturing sector. Highlights: 1) Capacity Utilisation (CU): At the aggregate level, CU declined successively for three quarters during 2016-17 and stood at 72.7 per cent in Q3:2016-17, co-moving with the de-trended index of industrial production2 (IIP) for manufacturing sector (Chart 1). 2) Order Books: New orders received during Q3:2016-17 recorded positive growth sequentially (quarter-on-quarter), although on a year-on-year basis, they declined for the third successive quarter (Chart 2). 3) Inventory to Sales Ratio: The finished goods inventory to sales ratio (FGI/S) remained almost at the same level as in the previous quarter, while the raw materials inventory to sales ratio (RMI/S) ticked up marginally in Q3:2016-17 (Chart 3). 4) Overall, movements in capacity utilisation, order books and inventories indicate that demand conditions in the manufacturing sector continued to remain subdued in Q3:2016-17.
ANNEX Table 1: IIP-Manufacturing and Capacity Utilisation (CU) –
(Based on common set of 661 companies in 5 quarters) | | Quarter | IIP-Mfg.
(Quarterly Average Base 2004-05) | De-trended Quarterly IIP-Manufacturing | CU
(in latest survey round) | CU *
(Ranges from previous four survey rounds) | | Q3:2015-16 | 184.3 | -4.6 | 72.2 | 71.9 – 72.6 | | Q4:2015-16 | 198.9 | 9.7 | 74.6 | 74.0 – 74.1 | | Q1:2016-17 | 187.3 | -2.3 | 73.6 | 72.7 – 72.9 | | Q2:2016-17 | 185.7 | -4.1 | 73.1 | 72.4 | | Q3:2016-17 | 184.8 | -5.3 | 72.7 | NA # | *: Since CU is computed based on common set of companies for five quarters, it gets revised in the subsequent four rounds.
#: CU is calculated first time for Q3:2016-17. |
Table 2: Order Books (Q3:2015-16 to Q3:2016-17) –
(Based on common set of 169 companies in 9 quarters)* | | Quarter | Amount (₹ Billion) | Q-o-Q Growth (%)** | Y-o-Y Growth (%) | | Average Backlog Orders | Average New Order Book | Average Pending Orders | Average Backlog Orders | Average New Order Book | Average Pending Orders | Average Backlog Orders | Average New Order Book | Average Pending Orders | | Q3:2015-16 | 1.108 | 0.915 | 1.106 | 7.9 | -1.3 | -0.2 | 4.9 | 5.6 | 7.7 | | Q4:2015-16 | 1.096 | 0.951 | 0.981 | -1.1 | 3.9 | -11.3 | 7.0 | 0.0 | -0.4 | | Q1:2016-17 | 0.980 | 0.916 | 0.951 | -10.6 | -3.7 | -3.1 | -0.7 | -2.3 | -7.3 | | Q2:2016-17 | 0.951 | 0.887 | 0.947 | -2.9 | -3.1 | -0.5 | -7.4 | -4.3 | -14.5 | | Q3:2016-17 | 0.943 | 0.904 | 0.982 | -0.8 | 1.9 | 3.7 | -14.9 | -1.3 | -11.2 | *: As required for calculating growth rates in recent 5 quarters.
**: Not seasonally adjusted |
Table 3: Average Sales and Inventories (Q3:2015-16 to Q3:2016-17) –
(Based on common set of 485 companies in 5 quarters) | | Quarter | Amount (₹ Billion) | Ratio (per cent) | | Average Sales | Average Total Inv | Average FG Inv | Average WiP Inv | Average RM Inv | Total Inv/Sales | FG Inv/Sales | RM Inv/Sales | | Q3:2015-16 | 6.703 | 3.177 | 1.467 | 0.339 | 1.372 | 47.4 | 21.9 | 20.5 | | Q4:2015-16 | 7.010 | 2.955 | 1.346 | 0.282 | 1.327 | 42.2 | 19.2 | 18.9 | | Q1:2016-17 | 6.757 | 3.265 | 1.542 | 0.346 | 1.378 | 48.3 | 22.8 | 20.4 | | Q2:2016-17 | 7.150 | 3.368 | 1.588 | 0.478 | 1.302 | 47.1 | 22.2 | 18.2 | | Q3:2016-17 | 7.480 | 3.469 | 1.639 | 0.414 | 1.417 | 46.4 | 21.9 | 18.9 | | RM - Raw Material; WiP - Work in progress; FG - Finished Goods; Inv – Inventory. |
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