The 35th round of the Reserve Bank of India’s Order Books, Inventories and Capacity Utilisation Survey (OBICUS) for July–September 2016 (Q2:2016-17) released today, captures data on order books, inventory levels for raw materials and finished goods, and capacity utilisation for 902 companies in the manufacturing sector (Tables 1-3)1. Highlights: 1) Capacity Utilisation (CU): At the aggregate level, CU stood at 72.4 per cent, marginally lower than in the previous quarter – but a little higher than a year ago – with broad co-movement with the de-trended manufacturing in the index of industrial production2 (IIP) manufacturing (Chart 1). 2) Order Books: New orders recorded a decline sequentially (quarter-on-quarter) as well as on a year-on-year basis and dipped into negative territory in Q2:2016-17 (Chart 2). 3) Inventory to Sales Ratio: The raw material inventory to sales ratio (RMI/S) was lower in Q2:2016-17 both sequentially and from a year ago. The finished goods inventory to sales ratio (FGI/S) also decreased in Q2:2016-17 on a sequential basis, but was broadly at the same level as a year ago (Chart 3). Overall, movements in capacity utilisation, order books and inventories indicate that demand conditions in the manufacturing sector remained subdued in Q2:2016-17.
ANNEX Table 1: IIP-Manufacturing and Capacity Utilisation (CU) –
(Based on common set of 857 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) | | Q2:2015-16 | 187.4 | -1.8 | 71.1 | 70.6 – 71.4 | | Q3:2015-16 | 184.3 | -5.4 | 72.3 | 72.1 – 72.6 | | Q4:2015-16 | 198.9 | 8.8 | 74.1 | 74.1 – 74.2 | | Q1:2016-17 | 187.3 | -3.3 | 72.7 | 72.9 | | Q2:2016-17 | 185.8 | -5.2 | 72.4 | 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 Q2:2016-17. |
Table 2: Order Books (Q2:2015-16 to Q2:2016-17) –
(Based on common set of 256 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 | | Q2:2015-16 | 1.320 | 0.864 | 1.345 | -0.3 | 1.1 | 1.9 | -0.5 | -3.3 | -3.1 | | Q3:2015-16 | 1.353 | 0.870 | 1.358 | 2.5 | 0.8 | 0.9 | -2.7 | 5.1 | 1.4 | | Q4:2015-16 | 1.344 | 0.899 | 1.235 | -0.7 | 3.3 | -9.0 | 0.5 | -7.5 | -6.5 | | Q1:2016-17 | 1.250 | 0.868 | 1.271 | -7.0 | -3.5 | 2.9 | -5.6 | 1.6 | -3.7 | | Q2:2016-17 | 1.277 | 0.830 | 1.263 | 2.2 | -4.3 | -0.7 | -3.3 | -3.8 | -6.2 | *: As required for calculating growth rates in recent 5 quarters.
**: Not seasonally adjusted |
Table 3: Average Sales and Inventories (Q2:2015-16 to Q2:2016-17) –
(Based on common set of 557 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 | | Q2:2015-16 | 5.721 | 2.926 | 1.238 | 0.343 | 1.344 | 51.1 | 21.6 | 23.5 | | Q3:2015-16 | 5.627 | 2.660 | 1.192 | 0.307 | 1.161 | 47.3 | 21.2 | 20.6 | | Q4:2015-16 | 5.760 | 2.508 | 1.114 | 0.267 | 1.127 | 43.5 | 19.3 | 19.6 | | Q1:2016-17 | 5.723 | 2.751 | 1.260 | 0.318 | 1.173 | 48.1 | 22.0 | 20.5 | | Q2:2016-17 | 6.100 | 2.826 | 1.296 | 0.330 | 1.200 | 46.3 | 21.2 | 19.7 | | RM - Raw Material; WiP - Work in progress; FG - Finished Goods; Inv – Inventory. |
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