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Date : Aug 02, 2017
OBICUS Survey on the Manufacturing sector - Q4:2016-17

Today, the Reserve Bank released results of the 37th round of the Order Books, Inventories and Capacity Utilisation Survey (OBICUS) conducted in April-June 2017 for the quarter January-March 2017. The survey provides a snapshot of demand conditions facing the Indian manufacturing sector1. Responses were received from 724 companies in this round of the survey.

Highlights:

1) Capacity Utilisation (CU): At the aggregate level, CU rose in a seasonal pick-up and stood at 74.1 per cent in Q4:2016-17, co-moving with the de-trended index of industrial production2 (IIP) for manufacturing sector (Chart 1). Seasonally adjusted CU declined marginally in Q4:2016-17.

2) Order Books: New orders recorded a substantial growth in Q4:2016-17 on both, quarter-on-quarter and year-on-year bases (Chart 2).

3) Finished Goods Inventory to Sales Ratio: The finished goods inventory to sales ratio (FGI/S) declined sequentially due to higher growth in sales; the ratio, however, stood at a slightly higher level on a year-on-year basis.

4) Raw Material Inventory to Sales Ratio: The raw material inventory to sales ratio (RMI/S) dipped significantly in Q4:2016-17 from the previous quarter’s level (Chart 3).


ANNEX

Table 1: IIP-Manufacturing and Capacity Utilisation (CU) –
(Based on common set of 628 companies in 5 quarters)
Quarter IIP-Mfg.
(Quarterly Average Base 2011-12)
De-trended Quarterly IIP-Manufacturing CU
(in latest survey round)
CU *
(Ranges from previous four survey rounds)
Q4:2015-16 123.2 4.4 74.4 74.0 – 74.6
Q1:2016-17 120.3 0.4 71.5 72.7 – 73.6
Q2:2016-17 121.2 0.2 71.0 72.4 – 73.1
Q3:2016-17 120.5 -1.6 72.1 72.7
Q4:2016-17 125.0 1.7 74.1 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 Q4:2016-17.

Table 2: Order Books (Q4:2015-16 to Q4:2016-17) –
(Based on common set of 141 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
Q4:2015-16 0.846 0.850 0.788 -2.5 4.7 -8.2 0.3 4.9 2.0
Q1:2016-17 0.785 0.774 0.759 -7.2 -8.9 -3.7 2.5 -3.2 -3.6
Q2:2016-17 0.759 0.792 0.750 -3.3 2.3 -1.1 -3.6 -4.0 -12.1
Q3:2016-17 0.747 0.754 0.762 -1.6 -4.7 1.6 -13.9 -7.1 -11.3
Q4:2016-17 0.765 0.954 0.679 2.5 26.5 -11.0 -9.5 12.3 -13.9
*: As required for calculating growth rates in recent 5 quarters.
**: Not seasonally adjusted

Table 3: Average Sales and Inventories (Q4:2015-16 to Q4:2016-17) –
(Based on common set of 389 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
Q4:2015-16 3.228 1.504 0.620 0.202 0.682 46.6 19.2 21.1
Q1:2016-17 2.826 1.588 0.664 0.234 0.690 56.2 23.5 24.4
Q2:2016-17 3.015 1.635 0.703 0.258 0.673 54.2 23.3 22.3
Q3:2016-17 3.145 1.698 0.659 0.279 0.761 54.0 20.9 24.2
Q4:2016-17 3.547 1.688 0.701 0.283 0.705 47.6 19.8 19.9
RM - Raw Material; WiP - Work in progress; FG - Finished Goods; Inv – Inventory.

1 The survey responses are those of the respondents. The 36th round of the OBICUS covering 710 manufacturing companies with reference period as October-December 2016 was released on the RBI website on April, 06, 2017.

2 IIP is calculated on a fixed base (currently 2011-12=100) whereas the denominator (viz. installed capacity) in CU is updated every quarter. For comparison, the trend component of IIP is removed.


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