Quarterly Industrial Outlook Survey: October-December 2010 (52nd Round)* This article presents the survey findings of Industrial Outlook Survey conducted for October- December 2010 quarter, the 52nd round in the series. It gives the assessment of business situation by companies in manufacturing sector, for the quarter October-December 2010, and their expectations for the ensuing quarter January-March 2011. The survey results signalled further improvement of business conditions in the Indian manufacturing sector for assessment quarter (October-December 2010). The Business Expectation Index – a measure that gives a single snapshot of the industrial outlook in each study quarter–registered an increase to 122.8 from 119.0 for the assessment quarter. However, the manufacturers expect the growth to moderate in January-March 2011. The expectation index is seen to decline marginally from 126.5 to 125.9 for January-March 2011 quarter but remains much above 100 which is the threshold that separates contraction from expansion. Highlights The survey conducted in October-December 2010 shows that the business condition in India’s manufacturing sector has improved further. However, the expectation for the January-March 2011 quarter shows no further improvement.
-
The demand conditions show signs of escalation during the assessment quarter. Production in the Indian manufacturing sector rose for the assessment quarter of the latest survey round, mirroring a similar increase in new orders and capacity utilisation. Demand was generated in the external market also, as exports have increased further. However, the manufacturing sector anticipates the progress of demand conditions to moderate in the next quarter. About one-fourth of the respondents reported addition to their labour force.
-
The financial conditions which slightly tightened in the previous quarter has reversed during the current quarter as the optimism level for overall financial situation improved during the assessment quarter, and the same is to improve further for the expectation quarter. The manufacturers reported marginal improvement in the availability of finance for the assessment as well as expectation quarters but at higher costs. Input prices are assessed to increase but the manufacturers are able to pass it on to the customers, at least partly, as it is reflected in the increase in selling prices for both the quarters under review.
-
The survey findings exhibit that the Indian manufacturing continued to gain strength as Business Expectation Index (BEI), for the assessment quarter (October-December 2010) increased to 122.8 from 119.0. However, the sentiment is expected to moderate for the January-March 2011 quarter with BEI moderating to 125.9 from 126.5 in the the previous quarter.
-
The industry-wise break-up shows that majority of the industry groups have positive overall business sentiments in the present quarter. Specifically, a few industry groups, viz., Transport equipment, Wood & Wood Products, Other (Non- Electrical) Machinery & Apparatus and Basic Chemicals are more optimistic than the others. Fertilisers, Cement and Textiles expect low business performance in Q4 FY10.
-
Size-wise analysis shows that improvement is seen across all size groups, but the bigger companies are more optimistic. They expect improved order book, and return of pricing power. Though the smaller companies (annual production less than `100 crore) have improved their performance, their growth is at a lower rate as compared to the bigger companies.
I. Introduction The Reserve Bank of India has been conducting the Industrial Outlook Survey (IOS) 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 survey covers private and public limited companies with a good size/industry representation. 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 Methodology1 II. 1. Sample Size The sample covers a panel of 3,000 public and private limited companies, mostly with paid-up capital above `50 lakh, in the manufacturing sector. The fieldwork for the survey was carried out by an agency during the two-month period ending November 2010. The panel of respondents is kept uniform to the extent possible with periodic updation in the case of addition of new companies or deletion 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 1,588 companies (57 per cent of the sample) within the stipulated time. Companies with incomplete or improperly filled-in schedules were excluded for the analysis. The study is based on responses of 1,561 companies which were included in the analysis. II. 3. The Survey Schedule The survey schedule consists of qualitative questions and the target respondents are senior management personnel or finance heads of the companies. The schedule canvassed on quarterly basis runs into two pages containing five blocks. (Annex) III. Survey Findings The survey results are being published in a concise form in the Reserve Bank’s quarterly publication ‘Macroeconomic and Monetary Developments’ since 2005. The survey findings of the 52nd round conducted for October-December 2010 quarter are presented in this article. III. 1. Demand conditions 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 survey seeks the company’s assessment for October-December 2010 and expectations for January- March 2011 on change in overall production (for all products put together). The net response on higher production registered an increase to 43.9 from 40.0 for the assessment quarter. However, for the expectation quarter, the net response has moderated marginally to 48.6 from 49.1 as compared to the previous survey round (Table 1 and Chart 1). III. 1. 2. Order Books The demand position of the manufacturing companies, as measured by order books, has also shown a similar trend. The net response, for the assessment quarter has recorded further increase while the same has moderated slightly for the expectation quarter (Table 2 and Chart 2).
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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1225 |
27.1 |
35.1 |
37.7 |
-8.0 |
41.8 |
15.8 |
42.3 |
26.0 |
Apr-Jun 09 |
1242 |
33.1 |
26.2 |
40.6 |
6.9 |
32.5 |
22.6 |
44.9 |
9.9 |
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 |
|
|
|
|
|
55.4 |
6.8 |
37.7 |
48.6 |
# Due to rounding off percentage may not add up to 100. |
III. 1.3. Pending Orders More than 80 per cent respondent companies reported no change in the pending order position, both for the assessment quarter as well as the ensuing quarter (Table 3 and Chart 3). III. 1.4. Capacity Utilisation The survey collects views of manufacturing companies on Capacity Utilisation of the main product (increase/decrease/no change), Level of capacity utilisation compared to the average in the last four quarters (above normal/below normal/normal) and Assessment of production capacity with regard to expected demand in the next six months (more than adequate/less than adequate/adequate).
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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1225 |
22.9 |
39.7 |
37.4 |
-16.8 |
37.3 |
16.7 |
46.1 |
20.6 |
Apr-Jun 09 |
1242 |
28.4 |
29.3 |
42.3 |
-0.9 |
31.0 |
24.6 |
44.4 |
6.4 |
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 |
|
|
|
|
|
49.6 |
5.6 |
44.8 |
44.0 |
# Due to rounding off percentage may not add up to 100. |
 |
While about 54 per cent of the respondent companies reported no change in the capacity utilisation of their main product, about 37 per cent of the companies reported an increase over the previous quarter. On net response basis, there is marginal improvement in Capacity Utilisation of the main product over previous quarter but the improvement is significant as compared to the position a year ago. The overall level of capacity utilisation is assessed to be normal with respect to average capacity in the last four quarters. The expectation for the next quarter also exhibited the similar sentiment. Assessment of Production capacity with regard to expected demand in next six months also shows that there will be adequate capacity in the current as well as in the next quarter (Table 4 and Chart 4).
III. 1.5. Inventory of Raw Materials & Finished Goods Majority of the respondents (81-85 per cent) reported maintaining the average level of Inventory of raw materials and Inventory of finished goods for the assessment as well as expectation quarter (Table 5). Around 10-12 per cent of the respondents assessed their inventory levels to be above average during the current quarter. The proportion is expected to decline marginally in the next quarter.
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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1225 |
36.3 |
4.3 |
59.4 |
32.0 |
16.9 |
5.4 |
77.8 |
11.5 |
Apr-Jun 09 |
1242 |
29.1 |
4.5 |
66.5 |
24.6 |
28.0 |
4.8 |
59.4 |
23.2 |
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 |
|
|
|
|
|
9.8 |
8.1 |
82.1 |
1.7 |
# Due to rounding off percentage may not add up to 100. |
Table: 4: Per cent Responses on Sentiments for Capacity Utilisation |
(Percentage responses)# |
Parameter |
Options |
Assessment for quarter |
Expectations for quarter |
July-Sept 2010 |
Oct-Dec 2010 |
Oct-Dec 2010 |
Jan-Mar 2011 |
1 |
2 |
3 |
4 |
5 |
6 |
Capacity Utilisation (main product) |
Increase |
34.7 |
36.8 |
38.9 |
39.1 |
No Change |
53.9 |
54.3 |
54.5 |
54.9 |
Decrease |
11.4 |
8.9 |
6.6 |
6.0 |
Net Response |
23.3 |
27.9 |
32.3 |
33.1 |
Level of Capacity Utilisation (compared to the average in last 4 quarters) |
Above normal |
14.8 |
16.0 |
15.5 |
17.2 |
Normal |
73.6 |
73.6 |
76.3 |
75.1 |
Below Normal |
11.7 |
10.4 |
8.3 |
7.7 |
Net Response |
3.1 |
5.6 |
7.2 |
9.5 |
Assessment of Prod. Capacity (with regard to expected demand in next 6 months) |
More than adequate |
11.2 |
10.6 |
12.4 |
10.6 |
Adequate |
80.8 |
81.6 |
80.7 |
82.2 |
Less than adequate |
8.0 |
7.8 |
6.9 |
7.2 |
Net Response |
3.3 |
2.9 |
5.6 |
3.4 |
III. 1.6. Exports and Imports The external sector development is gauged in the survey through the assessment and expectation of respondents on Exports and Imports. The survey results show the exports of the manufacturing sector in India grew further in the current survey quarter. The net response for the assessment quarter has increased to 21.2 per cent from 20.0 per cent in previous quarter (Table 6). However, the optimism of Indian manufactures with respect to exports growth is expected to remain at the same level in the expectation quarter.
Table 5: Assessment & Expectations for level of Inventory (Raw Material and Finished Goods) |
(Percentage responses)# |
Parameter |
Options |
Assessment for quarter |
Expectations for quarter |
July-Sept 2010 |
Oct-Dec 2010 |
Oct-Dec 2010 |
Jan-Mar 2011 |
1 |
2 |
3 |
4 |
5 |
6 |
Inventory of raw material |
Below average |
6.4 |
6.2 |
3.8 |
4.8 |
Average |
81.9 |
81.5 |
85.8 |
84.8 |
Above average |
11.7 |
12.4 |
10.4 |
10.4 |
Net Response |
-5.3 |
-6.2 |
-6.6 |
-5.6 |
Inventory of Finished goods |
Below average |
7.4 |
6.8 |
5.8 |
5.8 |
Average |
81.0 |
82.5 |
85.7 |
85.4 |
Above average |
11.7 |
10.7 |
8.6 |
8.8 |
Net Response |
-4.3 |
-3.9 |
-2.8 |
-3.0 |
Below average is optimistic |
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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1,225 |
17.8 |
34.8 |
47.4 |
-17.0 |
30.6 |
14.6 |
54.8 |
16.0 |
Apr-Jun 09 |
1,242 |
17.4 |
30.9 |
51.7 |
-13.5 |
19.5 |
23.3 |
57.3 |
-3.8 |
Jul-Sep 09 |
1,180 |
20.9 |
23.8 |
55.3 |
-2.9 |
20.6 |
20.5 |
59.0 |
0.1 |
Oct-Dec 09 |
1,256 |
27.3 |
18.1 |
54.6 |
9.2 |
27.0 |
14.5 |
58.5 |
12.5 |
Jan-Mar 10 |
1,079 |
28.9 |
16.2 |
54.9 |
12.7 |
31.2 |
11.0 |
57.8 |
20.2 |
Apr-Jun 10 |
1,092 |
29.1 |
13.7 |
57.2 |
15.3 |
30.0 |
11.5 |
58.5 |
18.5 |
Jul-Sep 10 |
1,403 |
31.8 |
11.8 |
56.5 |
20.0 |
30.8 |
10.1 |
59.1 |
20.7 |
Oct-Dec 10 |
1,561 |
32.6 |
11.4 |
56.0 |
21.2 |
34.4 |
8.3 |
57.3 |
26.1 |
Jan-Mar 11 |
|
|
|
|
|
34.4 |
8.1 |
57.5 |
26.3 |
# Due to rounding off percentage may not add up to 100. |
The survey reveals lower optimism of the manufacturing sector in terms of growth in imports. The net response on assessment and expectation for higher Imports declined marginally from those in the previous survey quarter (July-September 2010). (Table 7). III. 1.7. Employment Situation The Survey seeks responses from the manufacturers about their perceptions on change in employment in their companies covering full-time, part-time and casual labour. About 25 per cent of the respondents have reported addition to their labour force in October-December 2010 quarter which is also reflective of growing Demand condition (Table 8, Chart 6). A similar sentiment prevails for the ensuing quarter as well.
 |
Table 7: Assessment & Expectations for Imports |
(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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1,225 |
13.7 |
22.1 |
64.2 |
-8.4 |
19.7 |
10.6 |
69.7 |
9.1 |
Apr-Jun 09 |
1,242 |
17.1 |
18.4 |
64.5 |
-1.3 |
14.9 |
16.3 |
68.8 |
-1.4 |
Jul-Sep 09 |
1,180 |
21.8 |
14.0 |
64.2 |
7.8 |
17 |
12.4 |
70.6 |
4.6 |
Oct-Dec 09 |
1,256 |
23.3 |
10.3 |
66.5 |
13.0 |
21.3 |
9.8 |
68.9 |
11.5 |
Jan-Mar 10 |
1,079 |
25.5 |
8.4 |
66.1 |
17.1 |
23.4 |
6.5 |
70.1 |
16.9 |
Apr-Jun 10 |
1,092 |
27.7 |
6.8 |
65.6 |
20.9 |
22.9 |
5.9 |
71.2 |
17.1 |
Jul-Sep 10 |
1,403 |
28.6 |
6.6 |
64.7 |
22.0 |
27.0 |
5.4 |
67.6 |
21.7 |
Oct-Dec 10 |
1,561 |
27.3 |
6.4 |
66.3 |
20.9 |
27.3 |
5.1 |
67.6 |
22.2 |
Jan-Mar 11 |
|
|
|
|
|
26.7 |
5.4 |
67.9 |
21.3 |
# Due to rounding off percentage may not add up to 100. |
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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1,225 |
11.2 |
19.5 |
69.3 |
-8.3 |
16.0 |
8.3 |
75.7 |
7.7 |
Apr-Jun 09 |
1,242 |
11.9 |
15.2 |
72.9 |
-3.3 |
10.5 |
15.6 |
74.0 |
-5.1 |
Jul-Sep 09 |
1,180 |
14.2 |
10.1 |
75.7 |
4.1 |
11.5 |
10.0 |
78.6 |
1.5 |
Oct-Dec 09 |
1,256 |
18.2 |
7.9 |
73.9 |
10.3 |
15.8 |
7.0 |
77.2 |
8.8 |
Jan-Mar 10 |
1,079 |
21.0 |
7.3 |
71.7 |
13.7 |
18.2 |
6.1 |
75.6 |
12.1 |
Apr-Jun 10 |
1,092 |
21.7 |
7.0 |
71.3 |
14.7 |
19.5 |
5.9 |
74.7 |
13.6 |
Jul-Sep 10 |
1,403 |
25.1 |
6.3 |
68.6 |
18.7 |
21.8 |
5.1 |
73.1 |
16.8 |
Oct-Dec 10 |
1,561 |
24.8 |
5.4 |
69.9 |
19.4 |
24.7 |
3.6 |
71.7 |
21.0 |
Jan-Mar 11 |
|
|
|
|
|
25.0 |
4.3 |
70.7 |
20.6 |
# Due to rounding off percentage may not add up to 100. |
III.2. Financial Parameters The survey assesses sentiments about financial conditions through the following parameters, viz., 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 The financial condition, which moderated during the previous survey round, has reversed and has shown a significant improvement in optimism level in the current survey quarter (Table 9, Chart 7). The net response for the assessment quarter under review increased to 37.1 per cent from 30.6 per cent. The manufacturers also foresee further improvement in the overall financial situation for the expectation quarter as the net response registered a marginal rise to 41.1 per cent from 39.6 per cent.
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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1,225 |
20.3 |
29.9 |
49.9 |
-9.6 |
31.6 |
15.2 |
53.2 |
16.4 |
Apr-Jun 09 |
1,242 |
26.4 |
19.4 |
54.2 |
7.0 |
27.8 |
19.4 |
52.7 |
8.4 |
Jul-Sep 09 |
1,180 |
34.3 |
12.5 |
53.2 |
21.8 |
32.8 |
12.8 |
54.4 |
20.0 |
Oct-Dec 09 |
1,256 |
38.8 |
9.3 |
51.8 |
29.5 |
40.5 |
7.0 |
52.5 |
33.5 |
Jan-Mar 10 |
1,079 |
42.3 |
6.5 |
51.3 |
35.8 |
44.3 |
5.0 |
50.6 |
39.3 |
Apr-Jun 10 |
1,092 |
39.1 |
6.9 |
54.0 |
32.2 |
41.6 |
5.3 |
53.1 |
36.3 |
Jul-Sep 10 |
1,403 |
38.7 |
8.1 |
53.2 |
30.6 |
39.7 |
5.6 |
54.8 |
34.1 |
Oct-Dec 10 |
1,561 |
42.8 |
5.7 |
51.5 |
37.1 |
44.9 |
5.3 |
49.7 |
39.6 |
Jan-Mar 11 |
|
|
|
|
|
45.5 |
4.4 |
50.1 |
41.1 |
# Due to rounding off percentage may not add up to 100. |
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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1,225 |
36.0 |
11.9 |
52.1 |
24.1 |
37.9 |
5.0 |
57.1 |
32.9 |
Apr-Jun 09 |
1,242 |
57.0 |
24.6 |
9.2 |
24.6 |
31.1 |
7.9 |
61.0 |
23.2 |
Jul-Sep 09 |
1,180 |
31.2 |
7.4 |
61.4 |
23.8 |
32.3 |
6.0 |
61.7 |
26.3 |
Oct-Dec 09 |
1,256 |
35.2 |
6.4 |
58.4 |
28.8 |
34.7 |
4.3 |
61.0 |
30.4 |
Jan-Mar 10 |
1,079 |
35.8 |
5.3 |
58.9 |
30.5 |
36.8 |
4.0 |
59.2 |
32.7 |
Apr-Jun 10 |
1,092 |
34.7 |
4.8 |
60.5 |
29.9 |
31.9 |
4.3 |
63.8 |
27.7 |
Jul-Sep 10 |
1,403 |
35.6 |
6.3 |
58.1 |
29.3 |
35.2 |
4.1 |
60.7 |
31.1 |
Oct-Dec 10 |
1,561 |
41.3 |
4.1 |
54.6 |
37.1 |
38.4 |
3.6 |
58.0 |
34.8 |
Jan-Mar 11 |
|
|
|
|
|
40.7 |
3.0 |
56.3 |
37.8 |
III. 2.2. Working Capital Finance Requirement and Availability of Finance In line with assessed increase in production, the working capital finance requirement (excluding internal source of funds) for the assessment quarter (October-December 2010) increased with net response rising to 37.1 per cent from 29.3 per cent observed in the previous quarter (July-September 2010). A further increase in the expectation quarter is also anticipated (Table 10). The survey shows that higher percentage of respondents assesses/expects Availability of Finance to improve in the current/expectation quarter. This is reflected in the net response, which has risen for both the quarters under review (Table 11, Chart 8).
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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1,225 |
19.2 |
21.7 |
59.1 |
-2.5 |
28.7 |
15.0 |
56.3 |
13.7 |
Apr-Jun 09 |
1,242 |
24.8 |
13.6 |
61.6 |
11.2 |
23.8 |
14.5 |
61.7 |
9.3 |
Jul-Sep 09 |
1,180 |
28.0 |
8.8 |
63.2 |
19.2 |
27.0 |
10.4 |
62.6 |
16.6 |
Oct-Dec 09 |
1,256 |
30.3 |
7.2 |
62.5 |
23.0 |
31.7 |
5.6 |
62.7 |
26.1 |
Jan-Mar 10 |
1,079 |
32.1 |
6.4 |
61.5 |
25.7 |
33.7 |
4.5 |
61.8 |
29.2 |
Apr-Jun 10 |
1,092 |
32.3 |
5.9 |
61.8 |
26.4 |
31.2 |
4.4 |
64.4 |
26.8 |
Jul-Sep 10 |
1,403 |
32.6 |
6.0 |
61.4 |
26.6 |
32.9 |
4.4 |
62.7 |
28.5 |
Oct-Dec10 |
1,561 |
35.9 |
5.6 |
58.4 |
30.3 |
35.3 |
4.0 |
60.6 |
31.3 |
Jan-Mar 11 |
|
|
|
|
|
36.4 |
4.0 |
59.6 |
32.3 |
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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Oct-Dec 09 |
1,256 |
9.0 |
23.8 |
67.2 |
-14.7 |
|
|
|
|
Jan-Mar 10 |
1,079 |
7.7 |
23.6 |
68.7 |
-15.9 |
6.8 |
25.1 |
68.1 |
-18.3 |
Apr-Jun 10 |
1,092 |
7.0 |
28.9 |
64.0 |
-21.9 |
6.1 |
26.8 |
67.1 |
-20.6 |
Jul-Sep 10 |
1,403 |
5.0 |
33.2 |
61.8 |
-28.3 |
5.7 |
29.0 |
65.3 |
-23.3 |
Oct-Dec 10 |
1,561 |
4.0 |
37.9 |
58.1 |
-33.9 |
3.8 |
32.1 |
64.2 |
-28.3 |
Jan-Mar 11 |
|
|
|
|
|
3.7 |
35.0 |
61.3 |
-31.3 |
Decrease is optimism |
III. 2.3. Cost of External Finance The respondents are expressing stronger perception about rise in the cost of funds in the recent past. The survey results reveal that 37.9 per cent of the respondents feel that the cost of external fund have further risen during October-December 2010 (Table 12). One quarter ahead outlook also signals further rise in the cost of funds.
Table 13: 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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1,225 |
11.3 |
48.8 |
39.8 |
-37.5 |
16.9 |
29.8 |
53.3 |
-12.9 |
Apr-Jun 09 |
1,242 |
13.4 |
38.5 |
48.1 |
-25.1 |
15.4 |
34.0 |
50.6 |
-18.6 |
Jul-Sep 09 |
1,180 |
16.9 |
32.0 |
51.1 |
-15.1 |
16.0 |
29.4 |
54.5 |
-13.4 |
Oct-Dec 09 |
1,256 |
18.1 |
28.0 |
54.0 |
-9.9 |
20.2 |
23.0 |
56.8 |
-2.8 |
Jan-Mar 10 |
1,079 |
21.7 |
24.6 |
53.9 |
-2.9 |
21.1 |
20.1 |
58.8 |
1.1 |
Apr-Jun 10 |
1,092 |
20.2 |
25.0 |
54.9 |
-4.8 |
22.1 |
18.9 |
59.0 |
3.2 |
Jul-Sep 10 |
1,403 |
21.3 |
23.9 |
54.8 |
-2.5 |
22.2 |
19.1 |
58.7 |
3.1 |
Oct-Dec 10 |
1,561 |
22.7 |
23.1 |
54.2 |
-0.4 |
25.2 |
16.1 |
58.7 |
9.2 |
Jan-Mar 11 |
|
|
|
|
|
25.6 |
17.2 |
57.2 |
8.3 |
# Due to rounding off percentage may not add up to 100. |
Table 14: 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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1,225 |
29.1 |
37.2 |
33.7 |
-8.1 |
12.3 |
48.0 |
39.7 |
-35.7 |
Apr-Jun 09 |
1,242 |
14.3 |
40.6 |
45.1 |
-26.3 |
14.3 |
30.5 |
33.7 |
-16.2 |
Jul-Sep 09 |
1,180 |
8.1 |
49.8 |
42.1 |
-41.7 |
8.7 |
35.8 |
55.5 |
-27.1 |
Oct-Dec 09 |
1,256 |
6.3 |
53.4 |
40.3 |
-47.1 |
5.0 |
43.4 |
51.6 |
-38.4 |
Jan-Mar 10 |
1,079 |
2.2 |
62.3 |
35.5 |
-60.2 |
3.6 |
47.9 |
48.5 |
-44.3 |
Apr-Jun 10 |
1,092 |
2.5 |
65.2 |
32.3 |
-62.7 |
2.2 |
50.8 |
47.0 |
-48.6 |
Jul-Sep 10 |
1,403 |
3.5 |
61.8 |
34.7 |
-58.3 |
2.7 |
52.0 |
45.2 |
-49.3 |
Oct-Dec 10 |
1,561 |
2.4 |
66.3 |
31.3 |
-63.9 |
3.3 |
52.6 |
44.1 |
-49.3 |
Jan-Mar 11 |
|
|
|
|
|
2.3 |
55.9 |
41.8 |
-53.6 |
# Due to rounding off percentage may not add up to 100. |
III 2.5. Cost of Raw Material The survey results indicate continuance of input price pressure for the manufacturing companies in the October-December 2010 quarter (Table 14; Chart 10). A similar trend is seen for the expectation quarter as well. III 2.6. Selling Price The survey seeks responses on change in selling prices (ex-factory unit prices) of the manufactured products on aggregate basis. 30.2 per cent of the respondents have been able to pass on a part of rising input cost in the assessment quarter and 26.7 per cent expected the increase in the selling prices to continue for the forthcoming quarter (Table 15, Chart 10).
Table 15: 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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1,225 |
12.5 |
38.0 |
49.5 |
-25.5 |
21.2 |
17.1 |
61.7 |
4.1 |
Apr-Jun 09 |
1,242 |
17.0 |
24.4 |
58.0 |
-7.4 |
14.5 |
23.6 |
61.9 |
-9.1 |
Jul-Sep 09 |
1,180 |
19.4 |
19.2 |
61.4 |
0.2 |
17.2 |
17.2 |
65.6 |
0.0 |
Oct-Dec 09 |
1,256 |
18.6 |
15.9 |
65.5 |
2.6 |
19.2 |
13.2 |
67.6 |
6.0 |
Jan-Mar 10 |
1,079 |
24.6 |
12.2 |
63.2 |
12.4 |
20.7 |
10.9 |
68.4 |
9.8 |
Apr-Jun 10 |
1,092 |
29.3 |
12.0 |
58.6 |
17.3 |
22.4 |
9.1 |
68.5 |
13.3 |
Jul-Sep 10 |
1,403 |
28.0 |
14.2 |
57.8 |
13.8 |
24.4 |
9.2 |
66.3 |
15.2 |
Oct-Dec 10 |
1,561 |
30.2 |
10.0 |
59.8 |
20.2 |
25.7 |
8.7 |
65.5 |
17.0 |
Jan-Mar 11 |
|
|
|
|
|
26.7 |
8.1 |
65.2 |
18.6 |
# Due to rounding off percentage may not add up to 100. |
III. 3. Overall Business Conditions III. 3.1. Overall Business Situation The Overall Business Situation is a parameter that captures the overall confidence of manufacturing companies. The companies are required to indicate if their overall business situation would improve/ worsen/remain same. The net response about the overall business situation for assessment quarter shows marked improvement to 45.9 per cent from 38.7 per cent in the previous quarter. The net response for expectation quarter has also shown further optimism (Table 16, Chart 11).
III.3.2. Business Expectation Index (BEI) Business Expectation Index gives a single snapshot of the industrial outlook in each study quarter. This index is computed from the weighted average of net responses from all the industries on selected 9 performance parameters where the weights are the industries’ shares 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. Detailed methodology used in index compilation is given in the article Quarterly Industrial Outlook Surveys: Trends since 2001 published in October 2009 Bulletin.
Table 16: Assessment & Expectations of 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 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
Jan-Mar 09 |
1,225 |
24.1 |
35.2 |
40.7 |
-11.1 |
38.6 |
17.5 |
43.9 |
21.1 |
Apr-Jun 09 |
1,242 |
30.7 |
21.4 |
47.9 |
9.3 |
31.8 |
20.6 |
47.6 |
11.2 |
Jul-Sep 09 |
1,180 |
39.3 |
13.0 |
47.7 |
26.3 |
38.8 |
14.6 |
46.7 |
24.2 |
Oct-Dec 09 |
1,256 |
46.0 |
10.1 |
43.9 |
36.0 |
47.2 |
7.4 |
45.4 |
39.8 |
Jan-Mar 10 |
1,079 |
50.5 |
7.4 |
42.1 |
43.1 |
50.4 |
5.5 |
44.2 |
44.9 |
Apr-Jun 10 |
1,092 |
47.8 |
7.1 |
45.0 |
40.7 |
47.3 |
6.1 |
46.6 |
41.2 |
Jul-Sep 10 |
1,403 |
46.7 |
8.0 |
45.3 |
38.7 |
47.6 |
6.2 |
46.2 |
41.5 |
Oct-Dec 10 |
1,561 |
51.4 |
5.5 |
43.1 |
45.9 |
52.5 |
5.1 |
42.4 |
47.4 |
Jan-Mar 11 |
|
|
|
|
|
54.2 |
4.1 |
41.8 |
50.1 |
# Due to rounding off percentage may not add up to 100. |
The present round of the survey showed further improvement in the index for the assessment quarter. The index has increased to 122.8 for the assessment quarter from 119.0 (Statement 5). However, the same has moderated for the expectation quarter with the index dropping marginally to 125.9 from 126.5 observed in to the previous round (Chart 12). This shows that the manufacturing sector is expected to grow at a slower pace. III.5. Industry-wise Analysis Industry-wise analysis shows that Transport Equipment, Other Machinery & Apparatus and Rubber & Plastic industries expressed increased optimism in production for the quarter January-March 2011, whereas Fertilisers, Other Industries and Food Products were less optimistic (Table: 17). Amongst all the industry groups, Other Industries, Textiles & Cement are least optimistic about their Overall Financial Situation while Transport equipment, Diversified companies and Wood & Wood products industries are more optimistic.
The outlook on profit margin on net response basis in industries like Diversified companies, Wood & Wood products and Transport Equipment is more optimistic whereas Textiles and Food products industries are pessimistic. Among the industry groups, Transport Equipment, Other Machinery & Apparatus and Pharmaceutical & Medicines industries showed a greater inclination towards increasing the number of employees.
Table 17: Industry-wise Analysis |
Net Response (%) for January-March 2011 |
Industry |
Production |
Overall Financial Situation |
Profit margin |
Employment |
Overall Business Situation |
Transport Equipment |
72.1 |
61.3 |
24.0 |
37.7 |
78.5 |
Wood & wood products |
46.7 |
56.3 |
25.0 |
13.3 |
62.5 |
Other Machinery & Apparatus |
61.1 |
51.3 |
12.6 |
26.3 |
59.0 |
Basic Chemicals |
50.4 |
45.5 |
15.7 |
19.7 |
56.9 |
Basic Metals & Metal products |
53.3 |
44.8 |
17.1 |
24.6 |
54.5 |
Rubber & Plastic products |
59.1 |
42.2 |
11.2 |
25.6 |
54.4 |
Electrical machinery |
51.1 |
50.0 |
7.7 |
25.8 |
53.3 |
Pharmaceutical & Medicines |
54.3 |
40.0 |
3.1 |
26.0 |
52.6 |
Diversified companies |
50.0 |
57.7 |
26.9 |
23.1 |
50.0 |
Paper & Paper products |
45.5 |
34.1 |
12.8 |
2.3 |
43.2 |
Food products |
35.5 |
33.1 |
-3.3 |
14.8 |
41.0 |
Other industries |
30.9 |
24.2 |
-2.1 |
14.5 |
36.9 |
Textiles |
36.6 |
28.8 |
-5.6 |
12.4 |
35.8 |
Cement |
40.0 |
30.0 |
13.3 |
10.0 |
33.3 |
Fertilisers |
25.0 |
34.4 |
6.5 |
3.1 |
31.3 |
All Industries |
48.6 |
41.1 |
8.3 |
20.6 |
50.1 |
Table 17 is indexed based on Overall Business Situation. |
The Overall business situation is expected to be optimistic for the industry groups such as Transport Equipment, Wood & Wood products, Other Machinery & Apparatus whereas Fertilisers, Cement, and Textiles indutries are having frail, though positive, expectations. III.6. Size-wise analysis Bigger companies (annual production above `1,000 crore/PUC above `100 crore) are more optimistic about overall business and financial situations. The smaller companies (annual production less than `100 crore/PUC less than `10 crore) are less optimistic about demand conditions as their net response on production, order books and capacity utilisation are at lower levels than those of the bigger companies. Bigger companies are more optimistic about domestic as well as external demand (Table 18).
Table 18: Size-Wise Analysis: Annual Production and Paid-up Capital (PUC) |
Net Response (%) for January-March 2011 |
Parameter |
PUC-wise |
Production-wise |
Rd51 Small |
Rd52 Small |
Rd51 Medium |
Rd52 Medium |
Rd51 Large |
Rd52 Large |
Rd51 Small |
Rd52 Small |
Rd51 Medium |
Rd52 Medium |
Rd51 Large |
Rd52 Large |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
Overall Business Situation |
40.9 |
36.1 |
48.1 |
51.5 |
50.0 |
57.3 |
41.8 |
44.2 |
52.0 |
53.6 |
54.8 |
62.5 |
Overall Financial Situation |
27.7 |
26.0 |
40.4 |
42.9 |
49.4 |
43.2 |
32.1 |
32.6 |
45.5 |
47.0 |
50.0 |
54.3 |
Working Capital Finance Requirement |
33.3 |
24.0 |
34.4 |
39.0 |
44.6 |
45.7 |
30.9 |
28.3 |
36.8 |
44.3 |
44.1 |
51.3 |
Availability of Finance |
25.0 |
18.8 |
32.2 |
34.4 |
31.3 |
26.6 |
27.1 |
25.2 |
33.7 |
36.8 |
40.3 |
44.4 |
Cost of External Finance |
-16.7 |
-17.2 |
-28.5 |
-32.3 |
-43.2 |
-41.8 |
-22.6 |
-23.8 |
-31.4 |
-35.9 |
-40.3 |
-42.9 |
Production |
40.7 |
35.3 |
49.6 |
50.0 |
59.8 |
55.9 |
41.6 |
42.5 |
53.1 |
53.0 |
64.5 |
58.0 |
Order Books |
38.1 |
30.9 |
44.8 |
45.1 |
59.4 |
53.8 |
37.3 |
35.6 |
49.3 |
49.8 |
59.2 |
55.0 |
Pending Orders, if applicable |
5.1 |
7.3 |
1.0 |
1.3 |
2.9 |
-3.8 |
3.1 |
4.9 |
0.4 |
-0.3 |
1.7 |
-2.4 |
Cost of Raw Materials |
-55.8 |
-57.4 |
-49.0 |
-53.4 |
-43.9 |
-51.6 |
-53.8 |
-57.0 |
-46.5 |
-51.0 |
-46.5 |
-51.3 |
Inventory of Raw Materials |
-7.0 |
-7.2 |
-6.5 |
-5.2 |
-9.5 |
-9.5 |
-5.2 |
-2.3 |
-8.1 |
-8.7 |
-6.9 |
-7.2 |
Inventory of Finished Goods |
2.4 |
-2.0 |
-2.9 |
-3.0 |
-11.4 |
-5.6 |
0.3 |
-0.3 |
-4.9 |
-4.8 |
-8.5 |
-7.6 |
Capacity Utilisation |
18.9 |
20.8 |
33.5 |
33.9 |
37.3 |
45.1 |
27.2 |
28.2 |
34.9 |
35.1 |
44.3 |
45.6 |
Level of Capacity Utilisation |
-1.5 |
2.6 |
7.6 |
10.0 |
15.9 |
16.1 |
3.3 |
3.4 |
9.5 |
12.8 |
13.9 |
22.1 |
Assessment of the Production Capacity |
7.7 |
3.2 |
4.8 |
3.5 |
11.0 |
3.3 |
4.0 |
2.1 |
5.0 |
4.0 |
15.6 |
8.1 |
Employment in the Company |
8.5 |
9.0 |
22.5 |
22.3 |
23.5 |
20.2 |
14.9 |
12.9 |
24.5 |
25.2 |
31.7 |
34.2 |
Exports, if applicable |
20.0 |
10.2 |
26.2 |
28.2 |
34.7 |
28.9 |
18.3 |
20.6 |
28.4 |
26.9 |
48.4 |
48.5 |
Imports, if any |
7.9 |
9.7 |
23.5 |
22.3 |
24.3 |
26.5 |
15.0 |
15.4 |
26.0 |
23.7 |
33.8 |
34.3 |
Selling Prices |
18.0 |
16.2 |
16.4 |
18.8 |
18.8 |
24.7 |
16.5 |
13.7 |
16.4 |
22.7 |
21.8 |
22.8 |
If increase expected in selling prices, rate of such increase |
19.7 |
19.4 |
12.3 |
13.4 |
7.9 |
-2.2 |
15.2 |
16.9 |
11.9 |
10.3 |
8.2 |
10.3 |
Profit Margin |
0.8 |
-8.3 |
9.5 |
9.7 |
17.6 |
21.1 |
2.4 |
-0.7 |
13.1 |
13.4 |
17.7 |
23.8 |
III.7. Constraints for Attaining the Normal Production Level The survey reveals that 46 per cent of the companies reported constraints for attaining the normal production level during the quarter October- December 2010. The constraints reported are due to Shortage of Raw Materials, Shortage of Power, Shortage of Working Capital Finance, Lack of domestic demand and Lack of export demand. The major industry groups for which higher proportion of companies reported production constraints are Paper & paper products (64 per cent), Textiles (54 per cent), Basic Metals & Metal products (51), Food Products (50 per cent), Rubber and Plastics (48 per cent) and Cement (66 per cent). On the other end of the spectrum, only 29 per cent of the companies in Pharmaceutical & Medicines industry reported production constraints. Smaller companies, in terms of annual production or paid-up capital, felt more production constraints than the bigger ones.
III.9. Survey Results and Official Statistics The Business Expectations Indices (BEI) based on the information gathered on critical parameters in the Industrial Outlook Survey provides the private manufacturing sector’s aggregate assessment of the current quarter and outlook for the ensuing quarter. Chart 13 shows the co-movements of annual growth rates of quarterly GDP-Manufacturing, IIPManufacturing and the BEI-based on assessment and expectations.
Statement 1: Assessment of the Industrial performance for the October-December 2010 & Expectations of the Industrial Performance for the Quarter January-March 2011 |
(Percentage of responding companies)# |
Parameter |
Assessment |
Expectations |
Optimistic
Response |
Pessimistic
Response |
No Change |
Net
response
(5)=(2)-(3) |
Optimistic
Response |
Pessimistic
Response |
No Change |
Net
response
(9)=(6)-(7) |
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
(9) |
1 |
Overall Business Situation |
51.4 |
5.5 |
43.1 |
45.9 |
54.2 |
4.1 |
41.8 |
50.1 |
2 |
Overall Financial Situation |
42.8 |
5.7 |
51.5 |
37.1 |
45.5 |
4.4 |
50.1 |
41.1 |
3 |
Working Capital Finance Requirement |
41.3 |
4.1 |
54.6 |
37.1 |
40.7 |
3.0 |
56.3 |
37.8 |
4 |
Availability of Finance |
35.9 |
5.6 |
58.4 |
30.3 |
36.4 |
4.0 |
59.6 |
32.3 |
5 |
Cost of External Finance * |
4.0 |
37.9 |
58.1 |
-33.9 |
3.7 |
35.0 |
61.3 |
-31.3 |
6 |
Production |
53.9 |
10.0 |
36.0 |
43.9 |
55.4 |
6.8 |
37.7 |
48.6 |
7 |
Order Books |
46.9 |
9.1 |
44.0 |
37.9 |
49.6 |
5.6 |
44.8 |
44.0 |
8 |
Pending Orders, if applicable |
11.6 |
7.6 |
80.8 |
3.9 |
9.8 |
8.1 |
82.1 |
1.7 |
9 |
Cost of Raw Materials |
2.4 |
66.3 |
31.3 |
-63.9 |
2.3 |
55.9 |
41.8 |
-53.6 |
10 |
Inventory of Raw Materials |
6.2 |
12.4 |
81.5 |
-6.2 |
4.8 |
10.4 |
84.8 |
-5.6 |
11 |
Inventory of Finished Goods |
6.8 |
10.7 |
82.5 |
-3.9 |
5.8 |
8.8 |
85.4 |
-3.0 |
12 |
Capacity Utilisation |
36.8 |
8.9 |
54.3 |
27.9 |
39.1 |
6.0 |
54.9 |
33.1 |
13 |
Level of Capacity Utilisation |
16.0 |
10.4 |
73.6 |
5.6 |
17.2 |
7.7 |
75.1 |
9.5 |
14 |
Assessment of the Production Capacity |
10.6 |
7.8 |
81.6 |
2.9 |
10.6 |
7.2 |
82.2 |
3.4 |
15 |
Employment in the Company |
24.8 |
5.4 |
69.9 |
19.4 |
25.0 |
4.3 |
70.7 |
20.6 |
16 |
Exports, if applicable |
32.6 |
11.4 |
56.0 |
21.2 |
34.4 |
8.1 |
57.5 |
26.3 |
17 |
Imports, if any |
27.3 |
6.4 |
66.3 |
20.9 |
26.7 |
5.4 |
67.9 |
21.3 |
18 |
Selling Prices |
30.2 |
10.0 |
59.8 |
20.2 |
26.7 |
8.1 |
65.2 |
18.6 |
19 |
If increase expected in selling prices, rate of such increase |
26.9 |
11.7 |
61.4 |
15.2 |
23.6 |
10.5 |
65.8 |
13.1 |
20 |
Profit Margin |
22.7 |
23.1 |
54.2 |
-0.4 |
25.6 |
17.2 |
57.2 |
8.3 |
# Due to rounding off percentage may not add up to 100.
* Cost of external finance is included from the round Oct-Dec 2009. |
Statement 2: Net Response on Assessment of Industrial Performance Over the Latest Six Quarterly Rounds of the Industrial Outlook Survey |
(Per cent) |
Parameter |
Optimistic
view |
July-Sep
2009 |
Oct-Dec
2009 |
Jan-Mar
2010 |
Apr-June
2010 |
Jul-Sep
2010 |
Oct-Dec
2010 |
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
1 |
Overall Business Situation |
Better |
26.3 |
36.0 |
43.1 |
40.7 |
38.7 |
45.9 |
2 |
Overall Financial Situation |
Better |
21.8 |
29.5 |
35.8 |
32.2 |
30.6 |
37.1 |
3 |
Working Capital Finance Requirement |
Increase |
23.8 |
28.8 |
30.5 |
29.9 |
29.3 |
37.1 |
4 |
Availability of Finance |
Improve |
19.2 |
23.0 |
25.7 |
26.4 |
26.6 |
30.3 |
5 |
Cost of External Finance * |
Decrease |
|
-14.7 |
-15.9 |
-21.9 |
-28.3 |
-33.9 |
6 |
Production |
Increase |
22.6 |
28.9 |
36.5 |
35.4 |
40.0 |
43.9 |
7 |
Order Books |
Increase |
20.5 |
25.9 |
31.9 |
31.3 |
36.1 |
37.9 |
8 |
Pending Orders, if applicable |
Below normal |
17.4 |
11.6 |
8.8 |
6.9 |
5.1 |
3.9 |
9 |
Cost of Raw Materials |
Decrease |
-41.7 |
-47.1 |
-60.2 |
-62.7 |
-58.3 |
-63.9 |
10 |
Inventory of Raw Materials |
Below average |
-2.1 |
-4.2 |
-5.8 |
-5.0 |
-5.3 |
-6.2 |
11 |
Inventory of Finished Goods |
Below average |
-4.3 |
-4.3 |
-4.3 |
-4.1 |
-4.3 |
-3.9 |
12 |
Capacity Utilisation |
Increase |
10.1 |
16.5 |
21.7 |
21.1 |
23.3 |
27.9 |
13 |
Level of Capacity Utilisation |
Above normal |
-11.2 |
-3.9 |
3.0 |
2.5 |
3.1 |
5.6 |
14 |
Assessment of the Production Capacity |
More than adequate |
5.8 |
5.3 |
6.4 |
3.1 |
3.3 |
2.9 |
15 |
Employment in the Company |
Increase |
4.1 |
10.3 |
13.7 |
14.7 |
18.7 |
19.4 |
16 |
Exports, if applicable |
Increase |
-2.9 |
9.2 |
12.7 |
15.3 |
20.0 |
21.2 |
17 |
Imports, if any |
Increase |
7.8 |
13.0 |
17.1 |
20.9 |
22.0 |
20.9 |
18 |
Selling Prices |
Increase |
0.2 |
2.6 |
12.4 |
17.3 |
13.8 |
20.2 |
19 |
If increase expected in selling prices, rate of such increase |
Increase at lower rate |
23.2 |
19.3 |
21.6 |
17.4 |
15.2 |
15.2 |
20 |
Profit Margin |
Increase |
-15.1 |
-9.9 |
-2.9 |
-4.8 |
-2.5 |
-0.4 |
* Cost of external finance is included from the round Oct-Dec 2009. |
Statement 3: Net Response on Expectations of Industrial Performance Over the Latest Six Quarterly Rounds of the Industrial Outlook Survey |
(Per cent) |
Parameter |
Optimistic
view |
Oct-Dec
2009 |
Jan-Mar
2010 |
Apr-June
2010 |
July-Sep
2010 |
Oct-Dec
2010 |
Jan-Mar
2010 |
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
1 |
Overall Business Situation |
Better |
39.8 |
44.9 |
41.2 |
41.5 |
47.5 |
50.1 |
2 |
Overall Financial Situation |
Better |
33.5 |
39.3 |
36.3 |
34.1 |
39.6 |
41.1 |
3 |
Working Capital Finance |
|
|
|
|
|
|
|
|
Requirement |
Increase |
30.4 |
32.7 |
27.7 |
31.1 |
34.8 |
37.8 |
4 |
Availability of Finance |
Improve |
26.1 |
29.2 |
26.8 |
28.5 |
31.3 |
32.3 |
5 |
Cost of External Finance * |
Decrease |
|
-18.3 |
-20.6 |
-23.3 |
-28.3 |
-31.3 |
6 |
Production |
Increase |
35 |
40.0 |
35.9 |
40.2 |
49.1 |
48.6 |
7 |
Order Books |
Increase |
32.3 |
35.8 |
33.4 |
36.3 |
44.8 |
44.0 |
8 |
Pending Orders, if applicable |
Below normal |
11 |
5.7 |
6.4 |
4.2 |
1.5 |
1.7 |
9 |
Cost of Raw Materials |
Decrease |
-38.4 |
-44.3 |
-48.6 |
-49.3 |
-49.3 |
-53.6 |
10 |
Inventory of Raw Materials |
Below average |
-1.2 |
-3.6 |
-2.6 |
-5.1 |
-6.6 |
-5.6 |
11 |
Inventory of Finished Goods |
Below average |
-3.7 |
-1.9 |
-2.6 |
-5.0 |
-2.8 |
-3.0 |
12 |
Capacity Utilisation |
Increase |
22 |
25.4 |
19.7 |
26.5 |
32.3 |
33.1 |
13 |
Level of Capacity Utilisation |
Above normal |
-3.8 |
1.3 |
1.6 |
5.8 |
7.2 |
9.5 |
14 |
Assessment of the Production Capacity |
More than adequate |
6.5 |
5.0 |
7.1 |
4.1 |
5.6 |
3.4 |
15 |
Employment in the Company |
Increase |
8.8 |
12.1 |
13.6 |
16.8 |
21.0 |
20.6 |
16 |
Exports, if applicable |
Increase |
12.5 |
20.2 |
18.5 |
20.7 |
26.1 |
26.3 |
17 |
Imports, if any |
Increase |
11.5 |
16.9 |
17.1 |
21.7 |
22.2 |
21.3 |
18 |
Selling prices |
Increase |
6 |
9.8 |
13.3 |
15.2 |
17.0 |
18.6 |
19 |
If increase expected in selling prices, rate of such increase |
Increase at lower rate |
19.4 |
16.8 |
19.7 |
14.3 |
13.0 |
13.1 |
20 |
Profit Margin |
Increase |
-2.8 |
1.1 |
3.2 |
3.1 |
9.2 |
8.3 |
* Cost of external finance is included from the round Oct-Dec 2009. |
Statement 4: Comparative Scenarios Pertaining to Assessment for the Current Quarter and Expectations for the Expectation Quarter Based on the Net Responses for all Parameters from a Year Ago, Previous and Current Quarter Surveys (i.e., Round 48, 51 and 52, respectively) |
Parameter |
Optimistic
view |
Net Response (%) |
Differences in
net response |
Net Response (%) |
Differences in
net response |
Current
quarter
of a year
ago
survey |
Current
quarter
of
Pervious
survey |
Current
quarter
of
Current
survey |
A year
ago
survey |
Pervious
quarter
survey |
Current
quarter
of a year
ago
survey |
Current
quarter
of
Pervious
survey |
Current
quarter
of
Current
survey |
A year
ago
survey |
Pervious
quarter
survey |
(1) |
(2) |
(3) |
(4) |
(5) |
(6)=(5)- (3) |
(7)=(5)- (4) |
(8) |
(9) |
(10) |
(11)=(5)- (3) |
(12)=(5)- (4) |
1 Overall Business Situation |
Better |
36.0 |
38.7 |
45.9 |
10.0 |
7.2 |
44.9 |
47.5 |
50.1 |
5.2 |
2.7 |
2 Overall Financial Situation |
Better |
a29.5 |
30.6 |
37.1 |
7.6 |
6.6 |
39.3 |
39.6 |
41.1 |
1.7 |
1.5 |
3 Working Capital Finance Requirement |
Increase |
28.8 |
29.3 |
37.1 |
8.4 |
7.9 |
32.7 |
34.8 |
37.8 |
5.0 |
3.0 |
4 Availability of Finance |
Improve |
23.0 |
26.6 |
30.3 |
7.3 |
3.7 |
29.2 |
31.3 |
32.3 |
3.2 |
1.1 |
5 Cost of External Finance * |
Decrease |
-14.7 |
-28.3 |
-33.9 |
-19.2 |
-5.7 |
-18.3 |
-28.3 |
-31.3 |
-13.1 |
-3.0 |
6 Production |
Increase |
28.9 |
40.0 |
43.9 |
15.0 |
3.9 |
40.0 |
49.1 |
48.6 |
8.6 |
-0.5 |
7 Order Books |
Increase |
25.9 |
36.1 |
37.9 |
11.9 |
1.8 |
35.8 |
44.8 |
44.0 |
8.2 |
-0.7 |
8 Pending Orders, if applicable |
Below normal |
11.6 |
5.1 |
3.9 |
-7.6 |
-1.2 |
5.7 |
1.5 |
1.7 |
-4.0 |
0.2 |
9 Cost of Raw Materials |
Decrease |
-47.1 |
-58.3 |
-63.9 |
-16.7 |
-5.6 |
-44.3 |
-49.3 |
-53.6 |
-9.3 |
-4.2 |
10 Inventory of Raw Materials |
Below average |
-4.2 |
-5.3 |
-6.2 |
-2.0 |
-0.9 |
-3.6 |
-6.6 |
-5.6 |
-2.0 |
1.0 |
11 Inventory of Finished Goods |
Below average |
-4.3 |
-4.3 |
-3.9 |
0.4 |
0.4 |
-1.9 |
-2.8 |
-3.0 |
-1.1 |
-0.2 |
12 Capacity Utilisation |
Increase |
16.5 |
23.3 |
27.9 |
11.4 |
4.6 |
25.4 |
32.3 |
33.1 |
7.7 |
0.8 |
13 Level of Capacity Utilisation |
Above normal |
-3.9 |
3.1 |
5.6 |
9.5 |
2.5 |
1.3 |
7.2 |
9.5 |
8.2 |
2.3 |
14 Assessment of the Production Capacity |
More than adequate |
5.3 |
3.3 |
2.9 |
-2.5 |
-0.4 |
5.0 |
5.6 |
3.4 |
-1.6 |
-2.1 |
15 Employment in the Company |
Increase |
10.3 |
18.7 |
19.4 |
9.1 |
0.7 |
12.1 |
21.0 |
20.6 |
8.6 |
-0.4 |
16 Exports, if applicable |
Increase |
9.2 |
20.0 |
23.1 |
13.9 |
3.1 |
20.2 |
26.1 |
26.3 |
6.1 |
0.2 |
17 Imports, if any |
Increase |
13.0 |
22.0 |
20.9 |
7.9 |
-1.1 |
16.9 |
22.2 |
21.3 |
4.3 |
-1.0 |
18 Selling Prices |
Increase |
2.6 |
13.8 |
20.2 |
17.6 |
6.4 |
9.8 |
17.0 |
18.6 |
8.8 |
1.6 |
19 If increase expected in selling prices,rate of such increase |
Increase at lower rate |
19.3 |
15.2 |
15.2 |
-4.1 |
0.1 |
16.8 |
13.0 |
13.1 |
-3.7 |
0.1 |
20 Profit Margin |
Increase |
-9.9 |
-2.5 |
-0.4 |
9.5 |
2.2 |
1.1 |
9.2 |
8.3 |
7.3 |
-0.8 |
* Cost of external finance is included from the round Oct-Dec 2009. |
Statement 5: Business Expectations Index - based on Assessment and Expectations |
Quarter |
ASSESSMENT |
EXPECTATIONS |
Index |
Change over
previous
quarter |
Change over
previous
quarter |
Index |
Change over
previous
quarter |
Change over
previous
quarter |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
Oct-Dec 2000 |
113.9 |
-2.2 |
– |
124.4 |
-1.7 |
– |
Jan-Mar 2001 |
115.2 |
1.3 |
-7.6 |
122.5 |
-1.8 |
– |
Apr-Jun 2001 |
109.9 |
-5.3 |
-5.3 |
120.7 |
-1.8 |
-4.8 |
Jul-Sep 2001 |
108.7 |
-1.3 |
-7.4 |
118.9 |
-1.8 |
-7.2 |
Oct-Dec 2001 |
100.7 |
-8.0 |
-13.2 |
119.5 |
0.6 |
-4.9 |
Jan-Mar 2002 |
108.4 |
7.7 |
-6.8 |
105.3 |
-14.2 |
-17.3 |
Apr-Jun 2002 |
110.8 |
2.4 |
0.9 |
112.3 |
7.0 |
-8.5 |
Jul-Sep 2002 |
113.2 |
2.4 |
4.5 |
116.7 |
4.4 |
-2.2 |
Oct-Dec 2002 |
113.8 |
0.6 |
13.1 |
121.2 |
4.6 |
1.7 |
Jan-Mar 2003 |
118.4 |
4.6 |
10.0 |
119.7 |
-1.6 |
14.4 |
Apr-Jun 2003 |
109.8 |
-8.6 |
-1.0 |
117.8 |
-1.8 |
5.6 |
Jul-Sep 2003 |
114.3 |
4.5 |
1.1 |
117.2 |
-0.7 |
0.5 |
Oct-Dec 2003 |
119.8 |
5.4 |
5.9 |
122.1 |
4.9 |
0.8 |
Jan-Mar 2004 |
121.4 |
1.7 |
3.0 |
122.2 |
0.2 |
2.6 |
Apr-Jun 2004 |
118.4 |
-3.0 |
8.6 |
121.5 |
-0.7 |
3.7 |
Jul-Sep 2004 |
116.9 |
-1.5 |
2.6 |
120.0 |
-1.5 |
2.9 |
Oct-Dec 2004 |
122.0 |
5.1 |
2.2 |
121.5 |
1.5 |
-0.6 |
Jan-Mar 2005 |
122.5 |
0.5 |
1.1 |
123.2 |
1.7 |
1.0 |
Apr-Jun 2005 |
117.5 |
-5.0 |
-0.9 |
120.7 |
-2.5 |
-0.8 |
Jul-Sep 2005 |
114.9 |
-2.6 |
-2.0 |
119.6 |
-1.1 |
-0.4 |
Oct-Dec 2005 |
124.3 |
9.4 |
2.3 |
122.7 |
3.1 |
1.2 |
Jan-Mar 2006 |
120.7 |
-3.6 |
-1.8 |
125.7 |
3.0 |
2.5 |
Apr-Jun 2006 |
121.8 |
1.1 |
4.3 |
120.5 |
-5.2 |
-0.2 |
Jul-Sep 2006 |
120.7 |
-1.1 |
5.8 |
126.5 |
6.0 |
6.9 |
Oct-Dec 2006 |
123.9 |
3.2 |
-0.4 |
125.3 |
-1.2 |
2.6 |
Jan-Mar 2007 |
127.7 |
3.8 |
7.0 |
126.5 |
1.2 |
0.8 |
Apr-Jun 2007 |
115.8 |
-11.9 |
-6.0 |
127.5 |
1.0 |
7.0 |
Jul-Sep 2007 |
118.9 |
3.1 |
-1.8 |
121.1 |
-6.4 |
-5.4 |
Oct-Dec 2007 |
115.9 |
-3.0 |
-8.0 |
124.4 |
3.3 |
-0.9 |
Jan-Mar 2008 |
122.8 |
6.9 |
-4.9 |
118.6 |
-5.8 |
-7.9 |
Apr-Jun 2008 |
116.2 |
-6.6 |
0.4 |
123.2 |
4.6 |
-4.3 |
Jul-Sep 2008 |
113.4 |
-2.8 |
-5.5 |
122.1 |
-1.1 |
1.0 |
Oct-Dec 2008 |
104.1 |
-9.3 |
-11.8 |
118.9 |
-3.2 |
-5.5 |
Jan-Mar 2009 |
82.6 |
-21.5 |
-40.2 |
111.9 |
-7.0 |
-6.7 |
Apr-Jun 2009 |
99.4 |
16.8 |
-16.8 |
96.4 |
-15.5 |
-26.8 |
Jul-Sep 2009 |
107.2 |
7.8 |
-6.2 |
109.9 |
13.5 |
-12.2 |
Oct-Dec 2009 |
112.8 |
5.6 |
8.7 |
116.4 |
6.5 |
-2.5 |
Jan-Mar 2010 |
118.5 |
5.7 |
35.9 |
120.6 |
4.2 |
8.7 |
Apr-Jun 2010 |
115.9 |
-2.6 |
16.5 |
119.8 |
-0.8 |
23.4 |
July-Sep 2010 |
119.0 |
3.1 |
11.8 |
118.8 |
-1.0 |
8.9 |
Oct-Dec 2010 |
122.8 |
3.8 |
10.0 |
126.5 |
7.7 |
10.1 |
Jan-Mar 2011 |
|
|
|
125.9 |
-0.6 |
5.3 |
* Prepared in the Division of Enterprise Surveys (erstwhile part of Survey Division) of Department of Statistics and Information Management. The previous article on the subject based on 51st Round (July-September 2010) was published in December 2010 Bulletin. 1 The methodology used for the analysis has been provided in the article Quarterly Industrial Outlook Surveys: Trends since 2001 in October 2009 Bulletin. |
