Quarterly Industrial Outlook Survey:
April-June 2012
(Round 58)*
This article presents the findings of Industrial Outlook Survey conducted for April-June 2012 quarter, the 58th round in the series. This survey provides an assessment of business situation of companies in manufacturing sector, for the quarter April-June 2012, and their expectations for the ensuing quarter July-September 2012.The results for Q1: 2012-13 showed a reversal of the marginal improvement in business sentiments of the manufacturing sector observed in Q4: 2011-12. This was also reflected in the outlook of the previous round of the survey. The Business Expectation Index (BEI), a composite indicator based on several business parameters showed moderation for the assessment (from 114.9 to 107.4) as well as for the expectation quarters (from 116.8 to 114.0). However, the indices remained in the growth terrain (i.e., above 100, which is the threshold that separates contraction from expansion).
Highlights
-
The demand conditions based on the net response1 on production, order books, capacity utilisation (CU), imports and exports showed some moderation in the assessment quarter as compared with the previous quarter. A similar trend was observed for the expectation quarter as well.
-
Overall financial situation which improved in the last quarter after a steady decline in the previous four quarters reversed and moderated in the current quarter. Net response on availability of finance followed a similar trend. Cost of external finance is perceived to rise further. Majority of the respondents expected that the cost of raw material would rise further in the ensuing quarter. While higher percentage of respondents (on a net basis) assessed a decline in the profit margin over the previous quarter, the outlook for the next quarter remains more or less balanced.
-
Industry-wise and size-wise breakup showed that the sentiments in demand conditions and financial conditions moderated across the board.
-
As regards investment intentions during the year 2011-12 and 2012-13, 67 per cent companies had made investment in fixed capital in 2011-12. Among them, 64 per cent showed investment intentions for 2012-13. The corresponding figures were 71 per cent and 89 per cent, respectively, a year ago.
I. Introduction
The Reserve Bank of India has been conducting the Industrial Outlook Survey on a quarterly basis since 1998. The Survey gives insight into the perception of the public and private limited companies engaged in manufacturing activities about their own performance and prospects. The assessment of business sentiments for the current quarter and expectations for the ensuing quarter are based on qualitative responses on 20 major parameters covering overall business situation, financial situation, demand indicators, price, profit margins and employment situation. The survey provides useful forward-looking inputs for policymakers, analysts and business alike.
II. Data Coverage and Methodology
II.1 Sample Size
The sample covers a panel of about 2,000 public and private limited companies, mostly with paid-up capital above ` 5 million in the manufacturing sector. The fieldwork for the survey was carried out by an agency during mid-April to mid-June 2012. The panel of respondents is kept uniform to the extent possible with periodic updating in the case of addition of new companies or exclusion of closed/merged companies. The sample is chosen so as to get a good representation of size and industry.
II.2 Response to the Survey
The survey elicited response from 1404 manufacturing companies. The response rate was around 70 per cent.
II.3 Survey Schedule2
The survey schedule consists of mainly qualitative questions containing six blocks and the target respondents are senior management personnel or finance heads of the companies.
III. Survey Findings
III.1 Demand condition
The survey collects perceptions of the Indian manufacturers about prominent demand-related parameters, namely, production, order books, capacity utilisation, inventory, exports and imports.
III.1.1 Production
The net response favouring higher production in the assessment quarter showed lower optimism level after an improvement in the previous quarter. The net response declined for the expectation quarter also (Table 1 and Chart 1).
Table 1: Assessment & Expectations for Production |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Increase |
Decrease |
No change |
Net response |
Increase |
Decrease |
No change |
Net response |
Jul-Sep 09 |
1180 |
40.9 |
18.3 |
40.8 |
22.6 |
38.5 |
16.1 |
45.5 |
22.4 |
Oct-Dec 09 |
1256 |
44.0 |
15.2 |
40.8 |
28.9 |
46.0 |
11.0 |
43.0 |
35.0 |
Jan-Mar 10 |
1079 |
49.0 |
12.5 |
38.5 |
36.5 |
48.8 |
8.8 |
42.3 |
40.0 |
Apr-Jun 10 |
1092 |
48.4 |
13.0 |
38.6 |
35.4 |
45.8 |
9.9 |
44.3 |
35.9 |
Jul-Sep 10 |
1403 |
51.6 |
11.6 |
36.8 |
40.0 |
49.7 |
9.4 |
40.9 |
40.2 |
Oct-Dec 10 |
1561 |
53.9 |
10.0 |
36.0 |
43.9 |
55.9 |
6.8 |
37.3 |
49.1 |
Jan-Mar 11 |
1524 |
52.1 |
10.7 |
37.1 |
41.4 |
55.4 |
6.8 |
37.7 |
48.6 |
Apr-Jun 11 |
1504 |
47.8 |
15.7 |
36.5 |
32.1 |
49.1 |
9.1 |
41.8 |
40.0 |
July-Sep 11 |
1528 |
40.8 |
18.3 |
40.9 |
22.6 |
49.6 |
9.0 |
41.5 |
40.6 |
Oct-Dec 11 |
1450 |
42.2 |
16.9 |
41.0 |
25.3 |
49.5 |
9.5 |
41.0 |
39.9 |
Jan-Mar 12 |
1234 |
45.6 |
12.5 |
41.9 |
33.1 |
49.8 |
9.5 |
40.7 |
40.4 |
Apr-June 12 |
1404 |
38.8 |
18.5 |
42.7 |
20.3 |
45.4 |
10.6 |
44.0 |
34.7 |
July-Sep 12 |
|
|
|
|
|
45.4 |
11.7 |
42.9 |
33.6 |
#Due to rounding off percentage may not add up to 100. This is applicable throughout the article.
‘Increase’ in production is optimistic. |
III.1.2 Order Books
The order books position also showed moderation for the assessment quarter. However, marginal improvement is observed in the net response for the expectation quarter (Table 2 and Chart 2).
Table 2: Assessment & Expectations for Order books |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Increase |
Decrease |
No change |
Net response |
Increase |
Decrease |
No change |
Net response |
Jul-Sep 09 |
1180 |
38.2 |
17.7 |
44.1 |
20.5 |
35.5 |
18.7 |
45.8 |
16.8 |
Oct-Dec 09 |
1256 |
39.5 |
13.6 |
46.8 |
25.9 |
43.5 |
11.2 |
45.3 |
32.3 |
Jan-Mar 10 |
1079 |
43.5 |
11.6 |
44.9 |
31.9 |
44.8 |
9.1 |
46.1 |
35.8 |
Apr-Jun 10 |
1092 |
41.8 |
10.5 |
47.7 |
31.3 |
42.3 |
8.9 |
48.8 |
33.4 |
Jul-Sep 10 |
1403 |
45.4 |
9.3 |
45.3 |
36.1 |
44.4 |
8.1 |
47.5 |
36.3 |
Oct-Dec 10 |
1561 |
46.9 |
9.1 |
44.0 |
37.9 |
49.8 |
5.1 |
45.1 |
44.8 |
Jan-Mar 11 |
1524 |
44.8 |
10.1 |
45.2 |
34.7 |
49.6 |
5.6 |
44.8 |
44.0 |
Apr-Jun 11 |
1504 |
42.5 |
14.4 |
43.0 |
28.1 |
45.9 |
7.5 |
46.6 |
38.4 |
July-Sep 11 |
1528 |
37.9 |
17.6 |
44.5 |
20.3 |
45.4 |
9.4 |
45.2 |
35.9 |
Oct-Dec 11 |
1450 |
36.9 |
18.5 |
44.6 |
18.4 |
43.5 |
10.1 |
46.4 |
33.4 |
Jan-Mar 12 |
1234 |
38.9 |
14.1 |
47.0 |
24.8 |
42.3 |
11.0 |
46.7 |
31.3 |
Apr-Jun 12 |
1404 |
34.2 |
17.3 |
48.5 |
16.9 |
39.3 |
9.8 |
50.9 |
29.5 |
July-Sep12 |
|
|
|
|
|
14.0 |
11.1 |
47.9 |
29.9 |
‘Increase’ in order books is optimistic. |
 III.1.3 Pending order
The pending order position was at normal or below normal for most of the companies in assessment quarter and is expected to remain same in the expectation quarter (Table 3 and Chart 3).
Table 3: Assessment & Expectations for Pending Orders |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Below Normal |
Above Normal |
Normal |
Net response |
Below Normal |
Above Normal |
Normal |
Net response |
Jul-Sep 09 |
1180 |
21.1 |
3.7 |
75.2 |
17.4 |
22.9 |
3.8 |
73.4 |
19.1 |
Oct-Dec 09 |
1256 |
17.1 |
5.6 |
77.3 |
11.6 |
15.2 |
4.2 |
80.6 |
11.0 |
Jan-Mar 10 |
1079 |
15.5 |
6.7 |
77.8 |
8.8 |
12.2 |
6.5 |
81.3 |
5.7 |
Apr-Jun 10 |
1092 |
14.3 |
7.4 |
78.3 |
6.9 |
12.9 |
6.4 |
80.7 |
6.5 |
Jul-Sep 10 |
1403 |
12.0 |
6.9 |
81.1 |
5.1 |
11.4 |
7.3 |
81.3 |
4.2 |
Oct-Dec 10 |
1561 |
11.6 |
7.6 |
80.8 |
3.9 |
8.8 |
7.3 |
83.9 |
1.5 |
Jan-Mar 11 |
1524 |
12.5 |
6.9 |
80.6 |
5.5 |
9.8 |
8.1 |
82.1 |
1.7 |
Apr-Jun 11 |
1504 |
13.3 |
6.7 |
80.0 |
6.5 |
10.4 |
6.6 |
83.0 |
3.9 |
Jul-Sep 11 |
1528 |
18.0 |
4.7 |
77.3 |
13.3 |
11.8 |
7.2 |
81.0 |
4.5 |
Oct-Dec 11 |
1450 |
17.5 |
5.0 |
77.5 |
12.6 |
13.6 |
6.0 |
80.4 |
7.6 |
Jan-Mar 12 |
1234 |
15.9 |
5.4 |
78.7 |
10.5 |
13.7 |
6.5 |
79.8 |
7.3 |
Apr-June 12 |
1404 |
17.0 |
5.7 |
77.3 |
11.3 |
13.3 |
4.6 |
82.1 |
8.8 |
Jul-Sep 12 |
|
|
|
|
|
14.6 |
6.2 |
79.2 |
8.4 |
Pending Orders ‘Below Normal’ is optimistic. |
III.1.4 Capacity Utilisation
There is weak evidence of any rise in capacity utilisation with the net response moderating from 16.7 per cent to 8.6 per cent in assessment quarter. Marginal moderation is anticipated for the expectation quarter also (Table 4 and Chart 4).
Table 4: Assessment & Expectations for Capacity Utilisation |
(Percentage responses)# |
Parameter |
Options |
Assessment for Quarter |
Expectations for Quarter |
Jan-Mar 12 |
Apr-June 12 |
April-June 12 |
Jul-Sep 12 |
Capacity Utilisation (main product) |
Increase |
30.0 |
25.8 |
30.8 |
30.4 |
No Change |
56.7 |
57.1 |
58.4 |
57.6 |
Decrease |
13.3 |
17.1 |
10.9 |
12.0 |
Net Response |
16.7 |
8.6 |
19.9 |
18.4 |
Level of Capacity Utilisation (compared to the average in last 4 quarters) |
Above normal |
13.0 |
10.1 |
12.3 |
11.4 |
Normal |
71.3 |
71.9 |
76.6 |
75.6 |
Below Normal |
15.7 |
17.9 |
11.1 |
13.0 |
Net Response |
-2.6 |
-7.8 |
0.9 |
-1.5 |
Assessment of Prod. Capacity (with regard to expected demand in next 6 months) |
More than adequate |
11.4 |
12.4 |
11.3 |
13.0 |
Adequate |
81.4 |
79.6 |
82.0 |
80.0 |
Less than adequate |
7.2 |
8.0 |
6.7 |
7.1 |
Net Response |
4.3 |
4.4 |
4.6 |
5.9 |
‘Increase’ in Capacity utilisation is optimistic. |
III.1.5 Inventory of Raw Materials & Finished Goods
Majority of the respondents (80 to 86 per cent) have reported to have maintained the average level of inventory of raw materials and finished goods in the assessment quarter as well as in expectation quarter (Table 5).
Table 5: Assessment & Expectations for level of Inventory (Raw material and Finished goods) |
(Percentage responses)# |
Parameter |
Options |
Assessment for Quarter |
Expectations for Quarter |
Jan-Mar 12 |
Apr-Jun 12 |
Apr-Jun 12 |
Jul-Sep 12 |
Inventory of raw material |
Below average |
7.1 |
8.0 |
5.4 |
6.6 |
Average |
78.9 |
81.0 |
84.5 |
83.7 |
Above average |
14.0 |
11.0 |
10.1 |
9.7 |
Net Response |
-6.9 |
-2.9 |
-4.7 |
-3.1 |
Inventory of Finished goods |
Below average |
5.9 |
6.8 |
5.3 |
7.2 |
Average |
79.7 |
81.6 |
85.8 |
83.6 |
Above average |
14.5 |
11.7 |
8.9 |
9.2 |
Net Response |
-8.6 |
-4.9 |
-3.7 |
-2.1 |
Inventory of raw material and finished goods ‘Below average’ is optimistic |
III.1.6 Exports and Imports
The survey revealed lower optimism of the manufacturing sector in terms of growth in exports and imports. As compared with previous quarter, the net response for exports declined to 10.8 per cent from 14.2 per cent, and for imports it declined to 11.6 per cent from 14.4 per cent in the assessment quarter. However the outlook for the next quarter remained more or less balanced (Tables 6 & 7 and Charts 5 & 6).
Table 6: Assessment & Expectations for Exports |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Increase |
Decrease |
No change |
Net response |
Increase |
Decrease |
No change |
Net response |
Jul-Sep 09 |
1180 |
20.9 |
23.8 |
56.3 |
-2.9 |
20.6 |
20.5 |
59 |
0.1 |
Oct-Dec 09 |
1256 |
27.3 |
18.1 |
54.6 |
9.2 |
27.0 |
14.5 |
58.5 |
12.5 |
Jan-Mar 10 |
1079 |
28.9 |
16.2 |
54.9 |
12.7 |
31.2 |
11.0 |
57.8 |
20.2 |
Apr-Jun 10 |
1092 |
29.1 |
13.7 |
57.2 |
15.3 |
30.0 |
11.5 |
58.5 |
18.5 |
Jul-Sep 10 |
1403 |
31.8 |
11.8 |
56.5 |
20.0 |
30.8 |
10.1 |
59.1 |
20.7 |
Oct-Dec 10 |
1561 |
34.4 |
11.4 |
54.2 |
23.1 |
34.4 |
8.3 |
57.3 |
26.1 |
Jan-Mar 11 |
1524 |
32.1 |
13.2 |
54.7 |
18.9 |
34.4 |
8.1 |
57.5 |
26.3 |
Apr-Jun 11 |
1504 |
31.8 |
13.6 |
54.6 |
18.2 |
33.4 |
9.4 |
57.1 |
24.0 |
July-Sep 11 |
1528 |
28.7 |
15.7 |
56.6 |
13.1 |
35.1 |
9.2 |
55.7 |
25.8 |
Oct-Dec 11 |
1450 |
26.8 |
15.3 |
57.9 |
11.5 |
32.7 |
10.6 |
56.8 |
22.1 |
Jan-Mar 12 |
1234 |
27.8 |
13.6 |
58.6 |
14.2 |
29.0 |
10.4 |
60.6 |
18.6 |
Apr-Jun 12 |
1404 |
25.7 |
14.9 |
59.4 |
10.8 |
30.1 |
9.4 |
60.5 |
20.7 |
July-Sep 12 |
|
|
|
|
|
31.0 |
10.5 |
58.5 |
20.5 |
‘Increase’ in exports is optimistic |
Table 7: Assessment & Expectations for Import |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Increase |
Decrease |
No change |
Net response |
Increase |
Decrease |
No change |
Net response |
Jul-Sep 09 |
1180 |
21.8 |
14.0 |
64.2 |
7.8 |
17.0 |
12.4 |
70.6 |
4.6 |
Oct-Dec 09 |
1256 |
23.3 |
10.3 |
66.5 |
13.0 |
21.3 |
9.8 |
68.9 |
11.5 |
Jan-Mar 10 |
1079 |
25.5 |
8.4 |
66.1 |
17.1 |
23.4 |
6.5 |
70.1 |
16.9 |
Apr-Jun 10 |
1092 |
27.7 |
6.8 |
65.6 |
20.9 |
22.9 |
5.9 |
71.2 |
17.1 |
Jul-Sep 10 |
1403 |
28.6 |
6.6 |
64.7 |
22.0 |
27.0 |
5.4 |
67.6 |
21.7 |
Oct-Dec 10 |
1561 |
27.3 |
6.4 |
66.3 |
20.9 |
27.3 |
5.1 |
67.6 |
22.2 |
Jan-Mar 11 |
1524 |
27.0 |
7.1 |
65.8 |
19.9 |
26.7 |
5.4 |
67.9 |
21.3 |
Apr-Jun 11 |
1504 |
25.0 |
7.4 |
67.6 |
17.6 |
25.1 |
6.2 |
68.6 |
18.9 |
July-Sep 11 |
1528 |
23.3 |
7.6 |
69.2 |
15.7 |
25.1 |
6.1 |
68.9 |
19.0 |
Oct-Dec 11 |
1450 |
20.8 |
9.3 |
69.9 |
11.6 |
23.1 |
6.2 |
70.7 |
16.9 |
Jan-Mar 12 |
1234 |
22.5 |
8.0 |
69.5 |
14.4 |
23.0 |
7.5 |
69.4 |
15.5 |
Apr-Jun 12 |
1404 |
21.8 |
10.1 |
68.1 |
11.6 |
22.4 |
6.7 |
70.8 |
15.7 |
July-Sep 12 |
|
|
|
|
|
22.9 |
7.4 |
69.7 |
15.5 |
‘Increase’ in imports is optimistic |
III.1.7 Employment Situation
While 71 per cent of the respondents reported ‘no change’ in their labour force in the assessment quarter, the net response favouring higher employment moderated in both the quarters (Table 8, Chart 7).
Table 8: Assessment & Expectations for Employment Outlook |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Increase |
Decrease |
No change |
Net response |
Increase |
Decrease |
No change |
Net response |
Jul-Sep 09 |
1180 |
14.2 |
10.1 |
75.7 |
4.1 |
11.5 |
10.0 |
78.6 |
1.5 |
Oct-Dec 09 |
1256 |
18.2 |
7.9 |
73.9 |
10.3 |
15.8 |
7.0 |
77.2 |
8.8 |
Jan-Mar 10 |
1079 |
21.0 |
7.3 |
71.7 |
13.7 |
18.2 |
6.1 |
75.6 |
12.1 |
Apr-Jun 10 |
1092 |
21.7 |
7.0 |
71.3 |
14.7 |
19.5 |
5.9 |
74.7 |
13.6 |
Jul-Sep 10 |
1403 |
25.1 |
6.3 |
68.6 |
18.7 |
21.8 |
5.1 |
73.1 |
16.8 |
Oct-Dec 10 |
1561 |
24.8 |
5.4 |
69.9 |
19.4 |
24.7 |
3.6 |
71.7 |
21.0 |
Jan-Mar 11 |
1524 |
24.3 |
5.6 |
70.1 |
18.7 |
25.0 |
4.3 |
70.7 |
20.6 |
Apr-Jun 11 |
1504 |
24.3 |
6.1 |
69.6 |
18.2 |
23.0 |
5.6 |
71.4 |
17.4 |
July-Sep 11 |
1528 |
22.7 |
7.1 |
70.2 |
15.6 |
24.0 |
4.6 |
71.5 |
19.4 |
Oct-Dec 11 |
1450 |
18.9 |
7.6 |
73.5 |
11.3 |
21.7 |
5.2 |
73.1 |
16.5 |
Jan-Mar 12 |
1234 |
19.8 |
6.9 |
73.3 |
12.9 |
19.3 |
5.7 |
75.0 |
13.6 |
Apr-Jun 12 |
1404 |
19.8 |
9.7 |
70.5 |
10.0 |
19.9 |
5.2 |
74.9 |
14.6 |
July-Sep 12 |
|
|
|
|
|
20.5 |
8.3 |
71.2 |
12.3 |
‘Increase’ in employment is optimistic |
III.2 Financial Conditions
The survey assessed sentiments about the financial conditions based on overall financial situation, working capital finance requirement (excluding internal sources of funds), availability of finance (both internal and external sources), cost of external finance, cost of raw material, selling price and profit margin.
III.2.1 Overall Financial Situation
Lower optimism in overall financial situation is seen for both the assessment and expectation quarters. The net response for better financial situation moderated from 18.5 per cent to 14.2 per cent for the assessment quarter and from 27.7 per cent to 23.6 per cent for the expectation quarter (Table 9, Chart 8).
Table 9: Assessment & Expectations for Overall Financial Situation |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Better |
Worsen |
No change |
Net response |
Better |
Worsen |
No change |
Net response |
Jul-Sep 09 |
1180 |
34.3 |
12.5 |
53.2 |
21.8 |
32.8 |
12.8 |
54.4 |
20.0 |
Oct-Dec 09 |
1256 |
38.8 |
9.3 |
51.8 |
29.5 |
40.5 |
7.0 |
52.5 |
33.5 |
Jan-Mar 10 |
1079 |
42.3 |
6.5 |
51.3 |
35.8 |
44.3 |
5.0 |
50.6 |
39.3 |
Apr-Jun 10 |
1092 |
39.1 |
6.9 |
54.0 |
32.2 |
41.6 |
5.3 |
53.1 |
36.3 |
Jul-Sep 10 |
1403 |
38.7 |
8.1 |
53.2 |
30.6 |
39.7 |
5.6 |
54.8 |
34.1 |
Oct-Dec 10 |
1561 |
42.8 |
5.7 |
51.5 |
37.1 |
44.9 |
5.3 |
49.7 |
39.6 |
Jan-Mar 11 |
1524 |
35.7 |
8.6 |
55.8 |
27.1 |
45.5 |
4.4 |
50.1 |
41.1 |
Apr-Jun 11 |
1504 |
34.5 |
10.4 |
55.0 |
24.1 |
38.6 |
5.2 |
56.1 |
33.4 |
July-Sep 11 |
1528 |
27.8 |
16.0 |
56.2 |
11.7 |
37.4 |
6.8 |
55.7 |
30.6 |
Oct-Dec 11 |
1450 |
28.1 |
16.9 |
55.0 |
11.2 |
35.5 |
9.2 |
55.3 |
26.3 |
Jan-Mar 12 |
1234 |
30.4 |
11.9 |
57.8 |
18.5 |
35.3 |
10.2 |
54.5 |
25.2 |
Apr-Jun 12 |
1404 |
27.8 |
13.5 |
58.7 |
14.2 |
35.7 |
8.1 |
56.2 |
27.7 |
July-Sep 12 |
|
|
|
|
|
33.2 |
9.5 |
57.3 |
23.6 |
‘Better’ Overall financial situation is optimistic |
 III. 2.2 Working Capital Finance requirement and Availability of Finance
The sentiment for working capital finance requirement in the assessment quarter moderated with net response declined from 34.9 per cent to 30.4per cent. Similar sentiment is observed for the expectation quarter (Table 10).
Table 10: Assessment & Expectations for Working Capital Finance Requirement |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Increase |
Decrease |
No change |
Net response |
Increase |
Decrease |
No change |
Net response |
Jul-Sep 09 |
1180 |
31.2 |
7.4 |
61.4 |
23.8 |
32.3 |
6.0 |
61.7 |
26.3 |
Oct-Dec 09 |
1256 |
35.2 |
6.4 |
58.4 |
28.8 |
34.7 |
4.3 |
61.0 |
30.4 |
Jan-Mar 10 |
1079 |
35.8 |
5.3 |
58.9 |
30.5 |
36.8 |
4.0 |
59.2 |
32.7 |
Apr-Jun 10 |
1092 |
34.7 |
4.8 |
60.5 |
29.9 |
31.9 |
4.3 |
63.8 |
27.7 |
Jul-Sep 10 |
1403 |
35.6 |
6.3 |
58.1 |
29.3 |
35.2 |
4.1 |
60.7 |
31.1 |
Oct-Dec 10 |
1561 |
41.3 |
4.1 |
54.6 |
37.1 |
38.4 |
3.6 |
58.0 |
34.8 |
Jan-Mar 11 |
1524 |
41.0 |
4.1 |
54.9 |
36.9 |
40.7 |
3.0 |
56.3 |
37.8 |
Apr-Jun 11 |
1504 |
41.1 |
5.4 |
53.5 |
35.7 |
37.4 |
4.4 |
58.2 |
32.9 |
July-Sep 11 |
1528 |
36.8 |
5.7 |
57.4 |
31.1 |
38.7 |
5.1 |
56.3 |
33.6 |
Oct-Dec 11 |
1450 |
38.9 |
5.7 |
55.4 |
33.3 |
38.4 |
4.2 |
57.5 |
34.2 |
Jan-Mar 12 |
1234 |
40.0 |
5.1 |
54.8 |
34.9 |
38.0 |
4.2 |
57.8 |
33.8 |
Apr-Jun 12 |
1404 |
36.6 |
6.1 |
57.3 |
30.4 |
36.2 |
4.3 |
59.6 |
31.9 |
July-Sep 12 |
|
|
|
|
|
34.9 |
4.8 |
60.3 |
30.1 |
‘Increase’ in working capital finance is optimistic |
The survey results showed that higher percentage of respondents assessed availability of finance to worsen in the current and expected the same in the ensuing quarter (Table 11, Chart 9).
Table 11: Assessment & Expectations for Availability of Finance |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Improve |
Worsen |
No change |
Net response |
Improve |
Worsen |
No change |
Net response |
Jul-Sep 09 |
1180 |
28.0 |
8.8 |
63.2 |
19.2 |
27.0 |
10.4 |
62.6 |
16.6 |
Oct-Dec 09 |
1256 |
30.3 |
7.2 |
62.5 |
23.0 |
31.7 |
5.6 |
62.7 |
26.1 |
Jan-Mar 10 |
1079 |
32.1 |
6.4 |
61.5 |
25.7 |
33.7 |
4.5 |
61.8 |
29.2 |
Apr-Jun 10 |
1092 |
32.3 |
5.9 |
61.8 |
26.4 |
31.2 |
4.4 |
64.4 |
26.8 |
Jul-Sep 10 |
1403 |
32.6 |
6.0 |
61.4 |
26.6 |
32.9 |
4.4 |
62.7 |
28.5 |
Oct-Dec10 |
1561 |
35.9 |
5.6 |
58.4 |
30.3 |
35.3 |
4.0 |
60.6 |
31.3 |
Jan-Mar 11 |
1524 |
32.1 |
8.3 |
59.6 |
23.8 |
36.4 |
4.0 |
59.6 |
32.3 |
Apr-Jun 11 |
1504 |
30.2 |
8.7 |
61.1 |
21.5 |
32.6 |
5.3 |
62.2 |
27.3 |
July-Sep11 |
1528 |
24.0 |
12.0 |
64.0 |
12.1 |
30.0 |
5.8 |
64.2 |
24.2 |
Oct-Dec 11 |
1450 |
24.1 |
13.7 |
62.2 |
10.4 |
28.7 |
8.5 |
62.7 |
20.2 |
Jan-Mar 12 |
1234 |
26.1 |
10.3 |
63.5 |
15.8 |
28.2 |
9.1 |
62.7 |
19.0 |
Apr-Jun 12 |
1404 |
26.2 |
11.1 |
62.7 |
15.0 |
29.9 |
7.0 |
63.1 |
22.9 |
July-Sep12 |
|
|
|
|
|
28.0 |
7.7 |
64.3 |
20.4 |
‘Improvement’ in Availability of finance is optimism |
 III. 2.3 Cost of Finance
The perception about cost of finance remained negative for both the quarters under review. However, the percentage of respondents who experienced higher cost of finance over the previous quarter declined from 41.1 per cent to 37.8 per cent in assessment quarter. Correspondingly, share of respondents indicating ‘no change’ declined marginally. The sentiments were more optimistic for the expectation quarter (Table 12).
Table 12: Assessment & Expectations for Cost of External Finance |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Decrease |
Increase |
No change |
Net response |
Decrease |
Increase |
No change |
Net response |
Jan-Mar 10 |
1079 |
7.7 |
23.6 |
68.7 |
-15.9 |
6.8 |
25.1 |
68.1 |
-18.3 |
Apr-Jun 10 |
1092 |
7.0 |
28.9 |
64.0 |
-21.9 |
6.1 |
26.8 |
67.1 |
-20.6 |
Jul-Sep 10 |
1403 |
5.0 |
33.2 |
61.8 |
-28.3 |
5.7 |
29.0 |
65.3 |
-23.3 |
Oct-Dec10 |
1561 |
4.0 |
37.9 |
58.1 |
-33.9 |
3.8 |
32.1 |
64.2 |
-28.3 |
Jan-Mar 11 |
1524 |
3.5 |
46.0 |
50.6 |
-42.5 |
3.7 |
35.0 |
61.3 |
-31.3 |
Apr-Jun 11 |
1504 |
3.5 |
52.5 |
44.1 |
-49.0 |
3.9 |
38.9 |
57.1 |
-35.0 |
July-Sep 11 |
1528 |
3.5 |
53.7 |
42.9 |
-50.2 |
4.0 |
43.7 |
52.4 |
-39.7 |
Oct-Dec 11 |
1450 |
2.9 |
53.4 |
43.7 |
-50.6 |
3.4 |
44.4 |
52.2 |
-41.0 |
Jan-Mar 12 |
1234 |
3.8 |
41.1 |
55.1 |
-37.4 |
4.1 |
42.8 |
53.1 |
-38.8 |
Apr-Jun 12 |
1404 |
7.3 |
37.8 |
54.9 |
-30.5 |
9.9 |
32.6 |
57.6 |
-22.7 |
July-Sep 12 |
|
|
|
|
|
8.6 |
32.6 |
58.9 |
-24.0 |
#Cost of external finance ‘Decrease’ is optimistic |
III.2.4 Cost of Raw Material
Negative sentiment on cost of raw materials continued to persist for both the assessment and expectation quarters (Table 13, Chart 10).
Table 13: Assessment & Expectations for Cost of Raw Material |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Decrease |
Increase |
No change |
Net response |
Decrease |
Increase |
No change |
Net response |
Jul-Sep 09 |
1180 |
8.1 |
49.8 |
42.1 |
-41.7 |
8.7 |
35.8 |
56.5 |
-27.1 |
Oct-Dec 09 |
1256 |
6.3 |
53.4 |
40.3 |
-47.1 |
5.0 |
43.4 |
51.6 |
-38.4 |
Jan-Mar 10 |
1079 |
2.2 |
62.3 |
35.5 |
-60.2 |
3.6 |
47.9 |
48.5 |
-44.3 |
Apr-Jun 10 |
1092 |
2.5 |
65.2 |
32.3 |
-62.7 |
2.2 |
50.8 |
47.0 |
-48.6 |
Jul-Sep 10 |
1403 |
3.5 |
61.8 |
34.7 |
-58.3 |
2.7 |
52.0 |
45.2 |
-49.3 |
Oct-Dec 10 |
1561 |
2.4 |
66.3 |
31.3 |
-63.9 |
3.3 |
52.6 |
44.1 |
-49.3 |
Jan-Mar 11 |
1524 |
1.7 |
73.7 |
24.6 |
-71.9 |
2.3 |
55.9 |
41.8 |
-53.6 |
Apr-Jun 11 |
1504 |
4.5 |
70.0 |
25.6 |
-65.5 |
2.5 |
59.5 |
38.0 |
-57.0 |
July-Sep 11 |
1528 |
5.3 |
63.3 |
31.4 |
-58.1 |
4.8 |
56.6 |
38.6 |
-51.7 |
Oct-Dec 11 |
1450 |
5.1 |
66.3 |
28.7 |
-61.2 |
3.7 |
53.4 |
42.9 |
-49.7 |
Jan-Mar 12 |
1234 |
3.4 |
62.7 |
33.9 |
-59.4 |
4.0 |
54.1 |
41.9 |
-50.1 |
Apr-Jun 12 |
1404 |
3.1 |
66.2 |
30.7 |
-63.1 |
2.2 |
51.2 |
46.5 |
-49.0 |
July-Sep 12 |
|
|
|
|
|
3.5 |
54.9 |
41.6 |
-51.4 |
Cost of raw material ‘Decrease’ is optimistic |
 III.2.5 Selling price
Majority of the respondents (61-63 per cent) did not report any change in selling prices during both the quarters under review. Of the remaining, marginally higher percentage of respondents assessed/anticipated an increase in selling prices in the assessment/expectation quarter (Table 14, and Chart 11).
Table 14: Assessment & Expectations for Selling Price |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Increase |
Decrease |
No change |
Net response |
Increase |
Decrease |
No change |
Net response |
Jul-Sep 09 |
1180 |
19.4 |
19.2 |
61.4 |
0.2 |
17.2 |
17.2 |
65.6 |
0 |
Oct-Dec 09 |
1256 |
18.6 |
15.9 |
65.5 |
2.6 |
19.2 |
13.2 |
67.6 |
6.0 |
Jan-Mar 10 |
1079 |
24.6 |
12.2 |
63.2 |
12.4 |
20.7 |
10.9 |
68.4 |
9.8 |
Apr-Jun 10 |
1092 |
29.3 |
12.0 |
58.6 |
17.3 |
22.4 |
9.1 |
68.5 |
13.3 |
Jul-Sep 10 |
1403 |
28.0 |
14.2 |
57.8 |
13.8 |
24.4 |
9.2 |
66.3 |
15.2 |
Oct-Dec 10 |
1561 |
30.2 |
10.0 |
59.8 |
20.2 |
25.7 |
8.7 |
65.5 |
17.0 |
Jan-Mar 11 |
1524 |
35.7 |
9.2 |
55.1 |
26.5 |
26.7 |
8.1 |
65.2 |
18.6 |
Apr-Jun 11 |
1504 |
35.0 |
13.4 |
51.6 |
21.5 |
30.6 |
7.0 |
62.4 |
23.7 |
July-Sep 11 |
1528 |
27.3 |
16.6 |
56.1 |
10.7 |
29.1 |
10.7 |
60.2 |
18.3 |
Oct-Dec 11 |
1450 |
24.6 |
15.7 |
59.7 |
8.9 |
26.8 |
10.8 |
62.4 |
16.0 |
Jan-Mar 12 |
1234 |
25.1 |
11.6 |
63.3 |
13.5 |
25.0 |
10.3 |
64.7 |
14.7 |
Apr-Jun 12 |
1404 |
28.0 |
10.5 |
61.4 |
17.5 |
26.3 |
7.3 |
66.4 |
19.0 |
July-Sep 12 |
|
|
|
|
|
27.8 |
9.0 |
63.2 |
18.8 |
‘Increase’ in Selling price is optimistic |
 III.2.6 Profit margin
While higher percentage of respondents (on a net basis) assessed that the profit margin to decline over the previous quarter, the outlook for the next quarter remained more or less balanced (Table 15 and Chart 12).
Table 15: Assessment & Expectations for Profit Margin |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Increase |
Decrease |
No change |
Net response |
Increase |
Decrease |
No change |
Net response |
Jul-Sep 09 |
1180 |
16.9 |
32.0 |
51.1 |
-15.1 |
16.0 |
29.4 |
54.5 |
-13.4 |
Oct-Dec 09 |
1256 |
18.1 |
28.0 |
54.0 |
-9.9 |
20.2 |
23.0 |
56.8 |
-2.8 |
Jan-Mar 10 |
1079 |
21.7 |
24.6 |
53.9 |
-2.9 |
21.1 |
20.1 |
58.8 |
1.1 |
Apr-Jun 10 |
1092 |
20.2 |
25.0 |
54.9 |
-4.8 |
22.1 |
18.9 |
59.0 |
3.2 |
Jul-Sep 10 |
1403 |
21.3 |
23.9 |
54.8 |
-2.5 |
22.2 |
19.1 |
58.7 |
3.1 |
Oct-Dec 10 |
1561 |
22.7 |
23.1 |
54.2 |
-0.4 |
25.2 |
16.1 |
58.7 |
9.2 |
Jan-Mar 11 |
1524 |
20.8 |
25.1 |
54.1 |
-4.3 |
25.6 |
17.2 |
57.2 |
8.3 |
Apr-Jun 11 |
1504 |
18.2 |
28.1 |
53.6 |
-9.9 |
22.2 |
18.4 |
59.4 |
3.8 |
Jul-Sep 11 |
1528 |
15.2 |
32.3 |
52.5 |
-17.1 |
22.0 |
19.5 |
58.5 |
2.5 |
Oct-Dec 11 |
1450 |
15.2 |
32.5 |
52.4 |
-17.3 |
20.3 |
21.9 |
57.8 |
-1.6 |
Jan-Mar 12 |
1234 |
17.5 |
28.7 |
53.8 |
-11.3 |
20.1 |
23.1 |
56.8 |
-2.9 |
Apr-Jun 12 |
1404 |
15.4 |
33.3 |
51.3 |
-17.9 |
20.4 |
21.6 |
58.0 |
-1.2 |
July-Sep 12 |
|
|
|
|
|
20.1 |
23.6 |
56.3 |
-3.6 |
‘Increase’ in Profit margin is optimistic |
 III.3 Overall Business Situation
III.3.1 Overall Business Situation
The net response on overall business situation as perceived by the respondent companies, moderated for assessment and expectation quarters after an improvement in the previous quarter (Table 16, Chart 13).
Table 16: Assessment & Expectations for Overall Business Situation |
(Percentage responses)# |
Survey Quarter |
Total response |
Assessment for Current Quarter |
Expectation for Next Quarter |
Better |
Worsen |
No change |
Net response |
Better |
Worsen |
No change |
Net response |
Jul-Sep 09 |
1180 |
39.3 |
13.0 |
47.7 |
26.3 |
38.8 |
14.6 |
46.7 |
24.2 |
Oct-Dec 09 |
1256 |
46.0 |
10.1 |
43.9 |
36.0 |
47.2 |
7.4 |
45.4 |
39.8 |
Jan-Mar 10 |
1079 |
50.5 |
7.4 |
42.1 |
43.1 |
50.4 |
5.5 |
44.2 |
44.9 |
Apr-Jun 10 |
1092 |
47.8 |
7.1 |
45.0 |
40.7 |
47.3 |
6.1 |
46.6 |
41.2 |
Jul-Sep 10 |
1403 |
46.7 |
8.0 |
45.3 |
38.7 |
47.6 |
6.2 |
46.2 |
41.5 |
Oct-Dec 10 |
1561 |
51.4 |
5.5 |
43.1 |
45.9 |
52.5 |
5.1 |
42.4 |
47.4 |
Jan-Mar 11 |
1524 |
46.0 |
7.4 |
46.6 |
38.6 |
54.2 |
4.1 |
41.8 |
50.1 |
Apr-Jun11 |
1504 |
42.8 |
10.1 |
47.1 |
32.6 |
47.0 |
5.6 |
47.4 |
41.4 |
Jul-Sep 11 |
1528 |
34.1 |
15.4 |
50.5 |
18.7 |
46.6 |
6.8 |
46.6 |
39.8 |
Oct-Dec 11 |
1450 |
35.2 |
17.5 |
47.3 |
17.7 |
43.1 |
8.0 |
48.9 |
35.2 |
Jan-Mar 12 |
1234 |
37.8 |
11.3 |
50.9 |
26.5 |
43.6 |
10.0 |
46.5 |
33.6 |
Apr-Jun 12 |
1404 |
32.9 |
14.6 |
52.5 |
18.3 |
43.0 |
8.1 |
49.0 |
34.9 |
Jul-Sep 12 |
|
|
|
|
|
40.2 |
9.7 |
50.1 |
30.6 |
‘Better’ Overall Business Situation is optimistic |
 III.3.2 Business Expectation Index (BEI)
The Business Expectation Index gives a single snapshot of the industrial outlook in each quarter. This index is computed as a weighted average of net responses from all the industries on nine select performance parameters where the weights are the industry’s share in Gross Value Added (GVA). The selected parameters are ‘overall business situation’, ‘production’, ‘order books’, ‘inventory of raw materials’, ‘inventory of finished goods’, ‘profit margin’, ‘employment’, ‘exports’ and ‘capacity utilisation’. The methodology for compilation of the BEI is given in the article Quarterly Industrial Outlook Surveys: Trends since 2001 published in October 2009 Bulletin.
The results of this round showed that the BEI moderated to 107.4 from 114.9 for the assessment quarter, and to 114.0 from 116.8 for the expectation quarter. This moderation is observed for the corresponding quarter of previous year as well. However, it remains well above 100, the threshold that separates contraction from expansion (Table17 Chart 14).
Table 17: Business Expectation Index |
Quarter |
Assessment |
Expectations |
Index |
Change over previous quarter |
Change over previous year |
Index |
Change over previous quarter |
Change over previous year |
Jan-Mar 04 |
121.4 |
1.7 |
3.0 |
122.2 |
0.2 |
2.6 |
Apr-Jun 04 |
118.4 |
-3.0 |
8.6 |
121.5 |
-0.7 |
3.7 |
Jul-Sep 04 |
116.9 |
-1.5 |
2.6 |
120.0 |
-1.5 |
2.9 |
Oct-Dec 04 |
122.0 |
5.1 |
2.2 |
121.5 |
1.5 |
-0.6 |
Jan-Mar 05 |
122.5 |
0.5 |
1.1 |
123.2 |
1.7 |
1.0 |
Apr-Jun 05 |
117.5 |
-5.0 |
-0.9 |
120.7 |
-2.5 |
-0.8 |
Jul-Sep 05 |
114.9 |
-2.6 |
-2.0 |
119.6 |
-1.1 |
-0.4 |
Oct-Dec 05 |
124.3 |
9.4 |
2.3 |
122.7 |
3.1 |
1.2 |
Jan-Mar 06 |
120.7 |
-3.6 |
-1.8 |
125.7 |
3.0 |
2.5 |
Apr-Jun 06 |
121.8 |
1.1 |
4.3 |
120.5 |
-5.2 |
-0.2 |
Jul-Sep 06 |
120.7 |
-1.1 |
5.8 |
126.5 |
6.0 |
6.9 |
Oct-Dec 06 |
123.9 |
3.2 |
-0.4 |
125.3 |
-1.2 |
2.6 |
Jan-Mar 07 |
127.7 |
3.8 |
7.0 |
126.5 |
1.2 |
0.8 |
Apr-Jun 07 |
115.8 |
-11.9 |
-6.0 |
127.5 |
1.0 |
7.0 |
Jul-Sep 07 |
118.9 |
3.1 |
-1.8 |
121.1 |
-6.4 |
-5.4 |
Oct-Dec 07 |
115.9 |
-3.0 |
-8.0 |
124.4 |
3.3 |
-0.9 |
Jan-Mar 08 |
122.8 |
6.9 |
-4.9 |
118.6 |
-5.8 |
-7.9 |
Apr-Jun 08 |
116.2 |
-6.6 |
0.4 |
123.2 |
4.6 |
-4.3 |
Jul-Sep 08 |
113.4 |
-2.8 |
-5.5 |
122.1 |
-1.1 |
1.0 |
Oct-Dec 08 |
104.1 |
-9.3 |
-11.8 |
118.9 |
-3.2 |
-5.5 |
Jan-Mar 09 |
82.6 |
-21.5 |
-40.2 |
111.9 |
-7.0 |
-6.7 |
Apr-Jun 09 |
99.4 |
16.8 |
-16.8 |
96.4 |
-15.5 |
-26.8 |
Jul-Sep 09 |
107.2 |
7.8 |
-6.2 |
109.9 |
13.5 |
-12.2 |
Oct-Dec 09 |
112.8 |
5.6 |
8.7 |
116.4 |
6.5 |
-2.5 |
Jan-Mar 10 |
118.5 |
5.7 |
35.9 |
120.6 |
4.2 |
8.7 |
Apr-Jun 10 |
115.9 |
-2.6 |
16.5 |
119.8 |
-0.8 |
23.4 |
Jul-Sep 10 |
119.0 |
3.1 |
11.8 |
118.8 |
-1.0 |
8.9 |
Oct-Dec 10 |
122.8 |
3.8 |
10.0 |
126.5 |
7.7 |
10.1 |
Jan-Mar 11 |
122.0 |
-0.8 |
3.5 |
125.9 |
-0.6 |
5.3 |
Apr-Jun 11 |
116.3 |
-5.7 |
0.4 |
121.9 |
-4.0 |
2.1 |
Jul-Sep 11 |
109.4 |
-6.93 |
-9.67 |
121.5 |
-0.4 |
2.7 |
Oct-Dec 11 |
110.1 |
0.8 |
-12.7 |
118.8 |
-2.7 |
-7.7 |
Jan-Mar 12 |
114.9 |
4.8 |
-7.1 |
117.2 |
-1.6 |
-8.7 |
Apr-Jun 12 |
107.4 |
-2.7 |
-14.6 |
116.8 |
-0.4 |
-5.1 |
Jul-Sep 12 |
|
|
|
114.0 |
-2.8 |
-7.9 |
 III.3.3 Industry-wise and Size-wise Analysis
Most of the industry groups reported moderation in demand conditions and financial conditions as compared to the previous quarter. This moderation was seen more in the case of ‘Cement’ & ‘Textiles’ industries (Table 18).
Table 18: Assessment for important business parameters according to Industries |
(Net response in per cent) |
|
Production |
Order books |
Availability of Finance |
Cost of raw material |
Cost of finance |
Profit Margin |
|
Rd57 |
Rd58 |
Rd57 |
Rd58 |
Rd57 |
Rd58 |
Rd57 |
Rd58 |
Rd57 |
Rd58 |
Rd57 |
Rd58 |
Food products |
41.2 |
17.0 |
31.2 |
15.8 |
22.4 |
15.6 |
-50.5 |
-61.2 |
-25.0 |
-15.1 |
-3.0 |
-14.8 |
Textiles |
7.5 |
5.1 |
0.0 |
6.8 |
-3.1 |
1.1 |
-44.7 |
-40.4 |
-42.1 |
-33.9 |
-26.7 |
-21.1 |
Basic Metals & Metal products |
29.4 |
19.7 |
21.7 |
8.6 |
17.1 |
13.8 |
-61.1 |
-59.7 |
-39.0 |
-31.0 |
-5.6 |
-14.9 |
Electrical machinery |
43.2 |
23.5 |
37.5 |
26.0 |
22.5 |
20.2 |
-62.5 |
-68.7 |
-34.1 |
-33.7 |
-17.8 |
-36.0 |
Other Machinery(Non-electrical machinery) & Apparatus |
36.2 |
13.0 |
22.6 |
12.0 |
17.7 |
16.7 |
-66.0 |
-66.3 |
-39.1 |
-33.8 |
-18.9 |
-23.6 |
Transport Equipment |
49.4 |
26.0 |
37.5 |
6.7 |
16.5 |
16.8 |
-60.8 |
-62.2 |
-43.8 |
-26.5 |
-6.3 |
-12.5 |
Fertilisers |
24.0 |
27.3 |
16.7 |
18.5 |
19.2 |
27.8 |
-32.0 |
-63.9 |
-8.0 |
-22.2 |
0.0 |
-14.3 |
Pharmaceuticals & Medicines |
43.4 |
34.5 |
33.3 |
31.2 |
10.8 |
12.5 |
-64.6 |
-79.5 |
-39.7 |
-26.8 |
-10.8 |
-16.3 |
Basic Chemicals |
35.8 |
24.5 |
30.9 |
29.6 |
15.5 |
13.3 |
-62.9 |
-66.3 |
-37.2 |
-40.9 |
-11.6 |
-14.4 |
Rubber & Plastic products |
31.4 |
28.4 |
22.1 |
27.9 |
17.1 |
22.5 |
-69.6 |
-76.1 |
-41.2 |
-37.9 |
-12.7 |
-6.7 |
Paper & Paper products |
44.4 |
40.5 |
40.6 |
27.5 |
25.0 |
17.1 |
-52.8 |
-67.4 |
-55.6 |
-50.0 |
0.0 |
-2.3 |
Cement |
37.5 |
19.2 |
35.0 |
17.4 |
29.2 |
0.0 |
-62.5 |
-69.2 |
-25.0 |
-19.2 |
12.5 |
-11.5 |
Wood & wood products |
46.7 |
6.3 |
21.4 |
20.0 |
25.0 |
23.5 |
-68.8 |
-68.8 |
-37.5 |
-18.8 |
-12.5 |
-17.6 |
Diversified companies |
57.9 |
27.3 |
47.1 |
33.3 |
15.0 |
27.3 |
-75.0 |
-90.9 |
-47.4 |
-50.0 |
0.0 |
-20.0 |
Other industries |
27.5 |
23.1 |
26.8 |
20.2 |
23.5 |
23.9 |
-64.4 |
-65.5 |
-31.7 |
-24.6 |
-5.8 |
-23.3 |
All Industries |
33.1 |
20.3 |
24.8 |
16.9 |
15.8 |
15.0 |
-59.4 |
-63.1 |
-37.4 |
-30.5 |
-11.3 |
-17.9 |
Size-wise breakup shows that the sentiments in demand conditions and financial conditions moderated across the board. (Table 19).
Table 19: Assessment for important business parameters according to size (PUC-wise & Annual production-wise) of responding companies |
(Net response in per cent) |
|
|
|
Production |
Order books |
Availability of Finance |
Cost of raw material |
Cost of finance |
Profit Margin |
Rd57 |
Rd58 |
Rd57 |
Rd58 |
Rd57 |
Rd58 |
Rd57 |
Rd58 |
Rd57 |
Rd58 |
Rd57 |
Rd58 |
PUC-Wise |
Small |
23.9 |
9.6 |
15.0 |
6.1 |
5.8 |
7.3 |
-68.6 |
-66.7 |
-29.8 |
-25.0 |
-21.1 |
-26.9 |
Medium |
33.8 |
22.7 |
25.5 |
18.6 |
18.9 |
17.9 |
-57.3 |
-63.0 |
-39.0 |
-31.9 |
-10.0 |
-16.0 |
Big |
47.9 |
20.0 |
43.9 |
29.5 |
1.4 |
0.0 |
-63.0 |
-52.6 |
-35.3 |
-28.9 |
-2.7 |
-15.8 |
Annual Prod.-Wise |
Small |
24.3 |
16.5 |
16.8 |
11.1 |
13.0 |
9.6 |
-65.2 |
-66.2 |
-30.8 |
-28.4 |
-18.3 |
-21.9 |
Medium |
44.1 |
25.0 |
32.9 |
21.5 |
13.6 |
20.1 |
-51.4 |
-61.8 |
-39.1 |
-34.3 |
0.0 |
-16.7 |
Big |
44.1 |
17.0 |
32.9 |
22.5 |
13.6 |
16.5 |
-51.4 |
-56.3 |
-39.1 |
-24.2 |
0.0 |
-7.8 |
Smaller companies (annual production less than `. 1 billion /PUC less than ` 10 million).
Medium companies (annual production between `1 billion to `10 billion /PUC between ` 10 million `1 billion)
Big companies (annual production above ` 10 billion / PUC above `1 billion) |
III.3.4 Constraints for attaining the normal production level
About 50 per cent of companies reported production constraints for attaining the normal production level during the quarter April-June 2012. Major constraints reported are ‘shortage of power’ (39.4%), ‘lack of domestic demand’ (39.6%), ‘shortage of working capital finance’ (33.6%), ‘uncertainty of economic environment’ (34.8%) and ‘shortage of raw material’ (31.6%).
Industry-wise break-up revealed that the industry groups, viz, ‘textiles’, ‘basic metals and metal products’, ‘other machinery and apparatus’ and ‘transport equipment’, felt more production constraints when compared with other industries (Table 20).
IV. Investment Intention during the year 2011-12 and 2012-13
An additional data block (Block 6) is annually canvassed in the April-June quarter for the purpose of getting an assessment of the investment intentions of the manufacturing companies in fixed capital, i.e.,buildings, plants & machinery, etc. Among the responding companies, 67 per cent companies reported having made investment during the year 2011-12, of which 64 per cent companies planned for investment in the FY 2012-13 ( a year ago these were 71 per cent and 89 per cent respectively).‘Basic metals& metal products’, ‘other machinery & apparatus’, ‘textiles' and 'food products’ industries expressed higher investment intentions for FY 2012-13.
Table 20: Constraints for attaining the normal production level-Industry-wise |
|
Production Constraint |
NO |
YES |
Count |
Per cent |
Count |
Per cent |
Food products |
74 |
54.0 |
63 |
46.0 |
Textiles |
64 |
35.2 |
118 |
64.8 |
Basic Metals & Metal products |
78 |
40.4 |
115 |
59.6 |
Electrical machinery |
55 |
54.5 |
46 |
45.5 |
Other Machinery & Apparatus |
80 |
48.8 |
84 |
51.2 |
Transport Equipment |
48 |
49.0 |
50 |
51.0 |
Fertilisers |
18 |
50.0 |
18 |
50.0 |
Pharmaceutical & Medicines |
53 |
60.2 |
35 |
39.8 |
Basic Chemicals |
54 |
54.5 |
45 |
45.5 |
Rubber & Plastic products |
46 |
51.1 |
44 |
48.9 |
Paper & Paper products |
24 |
55.8 |
19 |
44.2 |
Cement |
13 |
50.0 |
13 |
50.0 |
Wood & wood products |
9 |
52.9 |
8 |
47.1 |
Diversified companies |
9 |
81.8 |
2 |
18.2 |
Other industries |
72 |
60.5 |
47 |
39.5 |
All Industries |
697 |
49.6 |
707 |
50.4 |
Statement: Net Responses on assessment and expectations – year-on-year and quarter-on-quarter changes |
(Per cent) |
Sr.
No. |
Parameter |
Optimism
Criteria |
ASSESSMENTS |
EXPECTATIONS |
Net
Response (%) |
Differences in net response of
current quarter
of current
survey overcurrent quarter of |
Net Response (%) |
Differences in net response of next quarter of current survey
over next quarter
of |
Cur rent quar ter of ayear ago sur vey(54) |
Cur rent quar ter of pre vious sur vey(57) |
Cur rent quar ter of cur rent sur vey(58) |
A year ago sur vey |
Per vious quar ter sur vey |
Next quar ter of a year ago sur vey (54) |
Next quar ter of pre vious sur vey (57) |
Next quar ter of cur rent sur vey (58) |
A year ago sur vey |
Pre vious quar ter sur vey |
Apr.-
Jun.
11 |
Oct.-
Dec.
11 |
Jan.-
Mar.
12 |
(5)-(3) |
(5)-(4) |
Apr.-
Jun.-
11 |
Jan.-
Mar.
12 |
Apr.-
Jun.
12 |
(10)-(8) |
(10)-(9) |
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
(9) |
(10) |
(11) |
(12) |
1 |
Overall business situation |
Better |
32.6 |
26.5 |
18.3 |
-14.3 |
-8.2 |
39.8 |
34.9 |
30.6 |
-9.2 |
-4.3 |
2 |
Financial situation |
Better |
24.1 |
18.5 |
14.2 |
-9.9 |
-4.3 |
30.6 |
27.7 |
23.6 |
-7.0 |
-4.1 |
3 |
Working capital finance requirement |
Increase |
35.7 |
34.9 |
30.4 |
-5.3 |
-4.5 |
33.6 |
31.9 |
30.1 |
-3.5 |
-1.8 |
4 |
Availability of finance |
Improve |
21.5 |
15.8 |
15.0 |
-6.5 |
-0.8 |
24.2 |
22.9 |
20.4 |
-3.8 |
-2.5 |
5 |
Cost of finance |
Decrease |
-49.0 |
-37.4 |
-30.5 |
18.5 |
6.9 |
-39.7 |
-22.7 |
-24.0 |
15.7 |
-1.3 |
6 |
Production |
Increase |
32.1 |
33.1 |
20.3 |
-11.8 |
-12.8 |
40.6 |
34.7 |
33.6 |
-7.0 |
-1.1 |
7 |
Order books |
Increase |
28.1 |
24.8 |
16.9 |
-11.2 |
-7.9 |
35.9 |
29.5 |
29.9 |
-6.0 |
0.4 |
8 |
Pending Orders, if applicable |
Below normal |
6.5 |
10.5 |
11.3 |
4.8 |
0.8 |
4.5 |
8.8 |
8.4 |
3.9 |
-0.4 |
9 |
Cost of raw material |
Decrease |
-65.5 |
-59.4 |
-63.1 |
2.4 |
-3.7 |
-51.7 |
-49.0 |
-51.4 |
0.3 |
-2.4 |
10 |
Inventory of raw material |
Below average |
-5.7 |
-6.9 |
-2.9 |
2.8 |
4.0 |
-2.9 |
-4.7 |
-3.1 |
-0.2 |
1.6 |
11 |
Inventory of finished goods |
Below average |
-7.0 |
-8.6 |
-4.9 |
2.1 |
3.7 |
-3.1 |
-3.7 |
-2.1 |
1.0 |
1.6 |
12 |
Capacity utilisation (Main Product) |
Increase |
17.2 |
16.7 |
8.6 |
-8.6 |
-8.1 |
25.0 |
19.9 |
18.4 |
-6.6 |
-1.5 |
13 |
Level of capacity utilisation (Compared to the average in preceding four quarters) |
Above normal |
-0.7 |
-2.6 |
-7.8 |
-7.1 |
-5.2 |
4.3 |
1.2 |
-1.5 |
-5.8 |
-2.7 |
14 |
Assessment of the production capacity (With regard to expected demand in next six months) |
More than adequate |
4.3 |
4.3 |
4.4 |
0.1 |
0.1 |
5.3 |
4.6 |
5.9 |
0.6 |
1.3 |
15 |
Employment in the company |
Increase |
18.2 |
12.9 |
10.0 |
-8.2 |
-2.9 |
19.4 |
14.6 |
12.3 |
-7.1 |
-2.3 |
16 |
Exports, if applicable |
Increase |
18.2 |
14.2 |
10.8 |
-7.4 |
-3.4 |
25.8 |
20.7 |
20.5 |
-5.3 |
-0.2 |
17 |
Imports, if any |
Increase |
17.6 |
14.4 |
11.6 |
-6.0 |
-2.8 |
19.0 |
15.7 |
15.5 |
-3.5 |
-0.2 |
18 |
Selling prices are expected to |
Increase |
21.5 |
13.5 |
17.5 |
-4.0 |
4.0 |
18.3 |
19.0 |
18.8 |
0.5 |
-0.2 |
19 |
If increase expected in selling prices |
Increase at lower rate |
14.8 |
20.7 |
15.9 |
1.1 |
-4.8 |
13.1 |
15.2 |
13.4 |
0.3 |
-1.8 |
20 |
Profit margin |
Increase |
-9.9 |
-11.3 |
-17.9 |
-8.0 |
-6.6 |
2.5 |
-1.2 |
-3.6 |
-6.1 |
-2.4 |
|