OBICUS Survey on the Manufacturing sector for Q2:2021-22

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Published on February 10, 2022

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OBICUS Survey on the Manufacturing sector for Q2:2021-22

Today, the Reserve Bank released the results of the 55th round of the quarterly Order Books, Inventories and Capacity Utilisation Survey (OBICUS), which provides a snapshot of demand conditions in India’s manufacturing sector¹ during July-September 2021. The survey covered 761 manufacturing companies.

Highlights:

At the aggregate level, capacity utilisation (CU) for the manufacturing sector recovered to 68.3 per cent in Q2:2021-22 after waning of the second wave of COVID-19 pandemic in the country, which had caused plummeting of CU to 60.0 per cent in the previous quarter (Chart 1).

Reflecting improved demand conditions, manufacturing companies recorded sequential (Q-o-Q) growth in new orders during Q2:2021-22 (Chart 2). On an annual (Y-o-Y) basis, however, new order growth moderated from the abnormally high growth in the previous quarter, which had large base effect.

As manufacturing companies maintained broadly similar level of inventories in Q1 and Q2 of 2021-22, improvement in sales during Q2:2021-22 led to sequential decline in the ratios of (a) finished goods inventory (FGI) to sales as well as (b) raw material inventory (RMI) to sales (Chart 3).

Note - Please see the excel file for time series data.

ANNEX 1: Data Tables

Table 1: IIP*-Manufacturing and Capacity Utilisation (CU)
Quarter	Number of responding companies	Capacity Utilisation	IIP-Manufacturing (Quarterly Average)	De-trended Quarterly IIP-Manufacturing
Q2:2020-21	563	63.3	121.2	-1.9
Q3:2020-21	610	66.6	133.2	0.1
Q4:2020-21	557	69.4	136.5	3.8
Q1:2021-22	640	60.0	119.1	-13.5
Q2:2021-22	728	68.3	131.1	-1.8
*: Index of Industrial Production (Base: 2011-12)

Table 2: Order Books (Q2:2020-21 to Q2:2021-22)
Quarter	Number of companies	Amount (₹ Crores)			Q-o-Q Growth # (per cent) **			Y-o-Y Growth # (per cent)
Quarter	Number of companies	Average Backlog Orders	Average New Order Book	Average Pending Orders	Backlog Orders	New Order Book	Pending Orders	Backlog Orders	New Order Book	Pending Orders
Q2:2020-21	137	146.3	184.8	154.1	0.5	108.6	5.2	6.0	10.4	8.6
Q3:2020-21	155	181.2	242.7	194.2	0.3	15.4	7.2	-13.8	22.1	-7.7
Q4:2020-21	85	199.8	243.4	196.3	7.6	2.3	-1.8	7.2	32.9	2.3
Q1:2021-22	120	188.1	171.0	197.8	-0.5	-19.0	5.3	11.8	105.7	17.3
Q2:2021-22	184	197.9	195.7	207.4	10.8	2.1	3.9	10.2	16.9	15.1
#: Growth rates are calculated using three rounds common set of companies, namely, companies responded in the current quarter, one quarter ago and a same quarter a year ago. **: Not seasonally adjusted.

Table 3: Sales and Inventories (Q2:2020-21 to Q2:2021-22)
Quarter	Number of Companies	Amount (₹ Crores)					Ratio (per cent) #
Quarter	Number of Companies	Average Sales	Average Total Inv	Average FG Inv	Average WiP Inv	Average RM Inv	Total Inv /Sales	FG Inv /Sales	RM Inv /Sales
Q2:2020-21	416	686.0	409.5	159.6	69.7	180.3	76.4	33.2	30.1
Q3:2020-21	471	719.6	372.3	143.5	60.0	168.8	56.8	21.7	26.6
Q4:2020-21	418	959.2	461.2	183.3	66.2	211.6	57.5	22.0	27.2
Q1:2021-22	478	869.2	489.7	208.8	79.7	201.2	78.6	29.5	36.9
Q2:2021-22	537	1012.6	494.4	200.0	78.6	215.8	60.5	20.9	29.4
#: Weighted average of industry level ratios using GVA as weights RM - Raw Material; WiP - Work in progress; FG - Finished Goods; Inv – Inventory.

Note: The computations of order book growths and inventory to sales ratios are based on methodology given in the OBICUS data release dated October 8, 2021 on RBI website
(link: /en/web/rbi/-/publications/obicus-survey-on-the-manufacturing-sector-for-q1-2021-22-20650).

¹ The survey responses are voluntary. Results of the previous survey round were released on the Bank’s website on October 8, 2021.