Quarterly Industrial Outlook Survey: October-December 2011 (Round 56)* This article presents the survey findings of Industrial Outlook Survey conducted for October- December 2011 quarter, the 56th round in the series. It gives the assessment of business situation of companies in manufacturing sector, for the quarter October- December 2011, and their expectations for the ensuing quarter January-March 2012. The survey results signal moderation of business conditions in the Indian manufacturing sector for assessment quarter as well as expectation quarter. The Business Expectation Index, a measure that gives a single snapshot of the industrial outlook in each study quarter, marginally increased to 110.1 from 109.4 for assessment quarter but declined to 117.2 from 118.8 for expectation quarter; however, it still remains well above 100, the threshold that separates contraction from expansion. Highlights • Though marginal improvement in Production and Capacity Utilisation (CU) was reported in the assessment quarter as well as expectation quarter as compared to the previous round of the survey, decline in net response1 for Order Books, Exports, Imports indicates moderate demand conditions in Indian manufacturing sector. • Financial condition showed lower optimism in both the quarters. Net response on Availability of finance has been on decline in the financial year 2011-12. While increasing proportion of respondents reported rise in ‘Cost of finance’ over previous 7 quarters, the trend appears to have slightly reversed for expectation quarter. Most of the respondents felt that pressure from ‘cost of raw material’ continued and was expected to elevate further in the next quarter. The optimism on ‘selling price’ and ‘profit margins’ further declined in both the assessment and expectation quarter. • Industry-wise analysis showed that majority of the industry groups reported more pessimism about input cost and less optimism about profit margin. However, ‘Food products’, ‘Cement‘, ‘Electrical machinery’ and ‘Pharmaceuticals’ industries reported higher optimism in demand conditions. • Size-wise analysis showed that bigger size companies had higher optimism for demand conditions as compared with their smaller counterparts; however, these companies were less optimistic on financial conditions. • On constrains for attaining normal production level, around one third of the responding companies reported ‘Uncertainty in Economic Environment’ for the first time 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 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.
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 |
1,180 |
40.9 |
18.3 |
40.8 |
22.6 |
38.5 |
16.1 |
45.5 |
22.4 |
Oct-Dec 09 |
1,256 |
44.0 |
15.2 |
40.8 |
28.9 |
46.0 |
11.0 |
43.0 |
35.0 |
Jan-Mar 10 |
1,079 |
49.0 |
12.5 |
38.5 |
36.5 |
48.8 |
8.8 |
42.3 |
40.0 |
Apr-Jun 10 |
1,092 |
48.4 |
13.0 |
38.6 |
35.4 |
45.8 |
9.9 |
44.3 |
35.9 |
Jul-Sep 10 |
1,403 |
51.6 |
11.6 |
36.8 |
40.0 |
49.7 |
9.4 |
40.9 |
40.2 |
Oct-Dec 10 |
1,561 |
53.9 |
10.0 |
36.0 |
43.9 |
55.9 |
6.8 |
37.3 |
49.1 |
Jan-Mar 11 |
1,524 |
52.1 |
10.7 |
37.1 |
41.4 |
55.4 |
6.8 |
37.7 |
48.6 |
Apr-Jun 11 |
1,504 |
47.8 |
15.7 |
36.5 |
32.1 |
49.1 |
9.1 |
41.8 |
40.0 |
Jul-Sep 11 |
1,528 |
40.8 |
18.3 |
40.9 |
22.6 |
49.6 |
9.0 |
41.5 |
40.6 |
Oct-Dec 11 |
1,450 |
42.2 |
16.9 |
41.0 |
25.3 |
49.5 |
9.5 |
41.0 |
39.9 |
Jan-Mar 12 |
|
|
|
|
|
49.8 |
9.5 |
40.7 |
40.4 |
‘Increase’ in production is optimistic.
# Due to rounding off, percentages may not add up to 100. This is applicable throughout this article. |
II. Data Coverage and Methodology2 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-October to mid-December 2011. 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 1,450 (response rate 72.5%) manufacturing companies. II.3 Survey Schedule The survey schedule (Annex) consists of mainly qualitative questions containing five blocks and the target respondents are senior management personnel or finance heads of the companies. III. Survey Findings III.1 Demand conditions 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 registered a marginal improvement to 25.3 per cent from 22.6 per cent for the assessment quarter and to 40.4 per cent from 39.9 per cent for the expectation quarter (Table 1 and Chart 1). III.1.2 Order Books However the demand condition in manufacturing companies, as measured by order books position showed a marginal decline in net responses for both the quarters under review (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 |
1,180 |
38.2 |
17.7 |
44.1 |
20.5 |
35.5 |
18.7 |
45.8 |
16.8 |
Oct-Dec 09 |
1,256 |
39.5 |
13.6 |
46.8 |
25.9 |
43.5 |
11.2 |
45.3 |
32.3 |
Jan-Mar 10 |
1,079 |
43.5 |
11.6 |
44.9 |
31.9 |
44.8 |
9.1 |
46.1 |
35.8 |
Apr-Jun 10 |
1,092 |
41.8 |
10.5 |
47.7 |
31.3 |
42.3 |
8.9 |
48.8 |
33.4 |
Jul-Sep 10 |
1,403 |
45.4 |
9.3 |
45.3 |
36.1 |
44.4 |
8.1 |
47.5 |
36.3 |
Oct-Dec 10 |
1,561 |
46.9 |
9.1 |
44.0 |
37.9 |
49.8 |
5.1 |
45.1 |
44.8 |
Jan-Mar 11 |
1,524 |
44.8 |
10.1 |
45.2 |
34.7 |
49.6 |
5.6 |
44.8 |
44.0 |
Apr-Jun 11 |
1,504 |
42.5 |
14.4 |
43.0 |
28.1 |
45.9 |
7.5 |
46.6 |
38.4 |
Jul-Sep 11 |
1,528 |
37.9 |
17.6 |
44.5 |
20.3 |
45.4 |
9.4 |
45.2 |
35.9 |
Oct-Dec 11 |
1,450 |
36.9 |
18.5 |
44.6 |
18.4 |
43.5 |
10.1 |
46.4 |
33.4 |
Jan-Mar 12 |
|
|
|
|
|
42.3 |
11.0 |
46.7 |
31.3 |
| ‘Increase’ in order books is optimistic. |
III.1.3 Pending Order The pending order position was at normal or below normal level for most of the companies in assessment quarter and is expected to remain there in the expectation quarter (Table 3 and Chart 3). III.1.4 Capacity Utilisation (CU) The survey collects views of manufacturing companies on change in CU level (increase/decrease / no change) for the main product, level of CU 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 3: Assessment & Expectations for Pending Orders |
(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 |
1,180 |
21.1 |
3.7 |
75.2 |
17.4 |
22.9 |
3.8 |
73.4 |
19.1 |
Oct-Dec 09 |
1,256 |
17.1 |
5.6 |
77.3 |
11.6 |
15.2 |
4.2 |
80.6 |
11.0 |
Jan-Mar 10 |
1,079 |
15.5 |
6.7 |
77.8 |
8.8 |
12.2 |
6.5 |
81.3 |
5.7 |
Apr-Jun 10 |
1,092 |
14.3 |
7.4 |
78.3 |
6.9 |
12.9 |
6.4 |
80.7 |
6.5 |
Jul-Sep 10 |
1,403 |
12.0 |
6.9 |
81.1 |
5.1 |
11.4 |
7.3 |
81.3 |
4.2 |
Oct-Dec 10 |
1,561 |
11.6 |
7.6 |
80.8 |
3.9 |
8.8 |
7.3 |
83.9 |
1.5 |
Jan-Mar 11 |
1,524 |
12.5 |
6.9 |
80.6 |
5.5 |
9.8 |
8.1 |
82.1 |
1.7 |
Apr-Jun 11 |
1,504 |
13.3 |
6.7 |
80.0 |
6.5 |
10.4 |
6.6 |
83.0 |
3.9 |
Jul-Sep 11 |
1,528 |
18.0 |
4.7 |
77.3 |
13.3 |
11.8 |
7.2 |
81.0 |
4.5 |
Oct-Dec 11 |
1,450 |
17.5 |
5.0 |
77.5 |
12.6 |
13.6 |
6.0 |
80.4 |
7.6 |
Jan-Mar 12 |
|
|
|
|
|
13.7 |
6.5 |
79.8 |
7.3 |
Pending Orders ‘Below Normal’ is optimistic. |
 |
While about 57 per cent of the respondents reported ‘no change’ in the CU of their main product, a marginal improvement in net response was reported for both the quarters (Table 4 and Chart 4).
Table 4: Assessment & Expectations for Capacity Utilisation |
(Percentage responses) # |
Parameter |
Options |
Assessment for Quarter |
Expectations for Quarter |
Jul- Sep 11 |
Oct- Dec 11 |
Oct- Dec 11 |
Jan- Mar 12 |
Capacity Utilisation (main product) |
Increase |
26.4 |
26.9 |
32.1 |
34.5 |
No Change |
57.0 |
56.9 |
57.9 |
55.3 |
Decrease |
16.5 |
16.1 |
10.0 |
10.2 |
Net Response |
9.9 |
10.8 |
22.2 |
24.3 |
Level of Capacity Utilisation (compared to the average in last 4 quarters) |
Above normal |
10.8 |
12.7 |
12.7 |
13.6 |
Normal |
72.0 |
69.0 |
75.0 |
73.8 |
Below Normal |
17.2 |
18.3 |
12.3 |
12.7 |
Net Response |
-6.4 |
-5.6 |
0.3 |
0.9 |
Assessment of Prod.Capacity (with regard to expected demand in next 6 months) |
More than adequate |
13.2 |
11.3 |
14.2 |
12.1 |
Adequate |
78.8 |
80.2 |
79.1 |
80.5 |
Less than adequate |
8.0 |
8.5 |
6.7 |
7.4 |
Net Response |
5.2 |
2.8 |
7.4 |
4.7 |
‘Increase’ in capacity utilisation is optimistic. |
III.1.5 Inventory of Raw Materials & Finished Goods Majority of the respondents (78 to 83 per cent) reported to have the average level of inventory of raw materials and inventory of finished goods for the assessment as well as expectation quarter (Table 5). The sentiments on the inventory position relatively remained same as compared with previous round of the survey.
Table 5: Assessment & Expectations for level of Inventory (Raw material and Finished goods) |
(Percentage responses) # |
Parameter |
Options |
Assessment for Quarter |
Expectations for Quarter |
Jul- Sep 11 |
Oct- Dec 11 |
Oct- Dec 11 |
Jan- Mar 12 |
Inventory of raw material |
Below average |
6.9 |
7.1 |
5.4 |
5.0 |
Average |
79.6 |
78.5 |
84.0 |
82.7 |
Above average |
13.5 |
14.4 |
10.6 |
12.3 |
Net Response |
-6.6 |
-7.3 |
-5.2 |
-7.3 |
Inventory of Finished goods |
Below average |
6.3 |
6.3 |
5.1 |
5.2 |
Average |
77.9 |
78.6 |
83.4 |
82.8 |
Above average |
15.8 |
15.1 |
11.5 |
12.0 |
Net Response |
-9.5 |
-8.9 |
-6.5 |
-6.8 |
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 |
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 |
34.4 |
11.4 |
54.2 |
23.1 |
34.4 |
8.3 |
57.3 |
26.1 |
Jan-Mar 11 |
1,524 |
32.1 |
13.2 |
54.7 |
18.9 |
34.4 |
8.1 |
57.5 |
26.3 |
Apr-Jun 11 |
1,504 |
31.8 |
13.6 |
54.6 |
18.2 |
33.4 |
9.4 |
57.1 |
24.0 |
Jul-Sep 11 |
1,528 |
28.7 |
15.7 |
55.6 |
13.1 |
35.1 |
9.2 |
55.7 |
25.8 |
Oct-Dec 11 |
1,450 |
26.8 |
15.3 |
57.9 |
11.5 |
32.7 |
10.6 |
56.8 |
22.1 |
Jan-Mar 12 |
|
|
|
|
|
29.0 |
10.4 |
60.6 |
18.6 |
| ‘Increase’ of exports is optimistic. |
III.1.6 Exports and Imports The survey reveals lower optimism of the manufacturing sector in terms of growth in exports and imports. The net response for exports declined to 11.5 per cent from 13.1 per cent whereas, for imports it declined to 11.6 per cent from 15.7 per cent in the assessment quarter. Similar decline in net response for exports and imports is expected for the expectation quarter (Table 6, Table 7 and Chart 5, Chart 6). III.1.7 Employment Situation About 74 per cent of the respondents reported ‘no change’ in their labour force in the assessment quarter and outlook for employment also remained same. However, the net response for increased employment declined further in both the quarters under review (Table 8 , Chart 7).
 |
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 |
Jul-Sep 09 |
1,180 |
21.8 |
14.0 |
64.2 |
7.8 |
17.0 |
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 |
1,524 |
27.0 |
7.1 |
65.8 |
19.9 |
26.7 |
5.4 |
67.9 |
21.3 |
Apr-Jun 11 |
1,504 |
25.0 |
7.4 |
67.6 |
17.6 |
25.1 |
6.2 |
68.6 |
18.9 |
Jul-Sep 11 |
1,528 |
23.3 |
7.6 |
69.2 |
15.7 |
25.1 |
6.1 |
68.9 |
19.0 |
Oct-Dec 11 |
1,450 |
20.8 |
9.3 |
69.9 |
11.6 |
23.1 |
6.2 |
70.7 |
16.9 |
Jan-Mar 12 |
|
|
|
|
|
23.0 |
7.5 |
69.4 |
15.5 |
‘Increase’ in imports is optimistic. |
III.2 Financial Conditions The survey assesses sentiments about financial conditions based on the parameters, viz., overall financial situation, working capital finance requirement (excluding internal sources of funds), and 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 Overall financial situation showed further decline in optimism in the assessment quarter. The net response for better financial situation in assessment quarter decreased to 11.2 per cent from 11.7 per cent in the previous quarter. The manufacturers also foresee decline in overall financial situation for the expectation quarter as the net response is expected to decline to 25.2 per cent from 26.3 per cent (Table 9, Chart 8).
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 |
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 |
1,524 |
24.3 |
5.6 |
70.1 |
18.7 |
25.0 |
4.3 |
70.7 |
20.6 |
Apr-Jun 11 |
1,504 |
24.3 |
6.1 |
69.6 |
18.2 |
23.0 |
5.6 |
71.4 |
17.4 |
Jul-Sep 11 |
1,528 |
22.7 |
7.1 |
70.2 |
15.6 |
24.0 |
4.6 |
71.5 |
19.4 |
Oct-Dec 11 |
1,450 |
18.9 |
7.6 |
73.5 |
11.3 |
21.7 |
5.2 |
73.1 |
16.5 |
Jan-Mar 12 |
|
|
|
|
|
19.3 |
5.7 |
75.0 |
13.6 |
| Increase’ in employment is optimistic. |
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 |
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 |
1,524 |
35.7 |
8.6 |
55.8 |
27.1 |
45.5 |
4.4 |
50.1 |
41.1 |
Apr-Jun 11 |
1,504 |
34.5 |
10.4 |
55.0 |
24.1 |
38.6 |
5.2 |
56.1 |
33.4 |
Jul-Sep 11 |
1,528 |
27.8 |
16.0 |
56.2 |
11.7 |
37.4 |
6.8 |
55.7 |
30.6 |
Oct-Dec 11 |
1,450 |
28.1 |
16.9 |
55.0 |
11.2 |
35.5 |
9.2 |
55.3 |
26.3 |
Jan-Mar 12 |
|
|
|
|
|
35.3 |
10.2 |
54.5 |
25.2 |
| Overall financial situation ‘Better’ is optimistic. |
III.2.2 Working Capital Finance requirement and Availability of Finance The sentiment for working capital finance requirement (WCFR) (excluding internal source of funds) in the assessment quarter improved with net response increasing to 33.3 per cent from 31.1 per cent. However, marginal decline is anticipated for the expectation quarter (Table 10). The survey showed that higher percentage of respondents assesses/expects Availability of Finance (AF) to worsen in the current/ensuing quarter. The net response on ‘Availability of finance’ has been on decline in the financial year 2011-12 (Table 11, Chart 9).
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 |
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 |
1,524 |
41.0 |
4.1 |
54.9 |
36.9 |
40.7 |
3.0 |
56.3 |
37.8 |
Apr-Jun 11 |
1,504 |
41.1 |
5.4 |
53.5 |
35.7 |
37.4 |
4.4 |
58.2 |
32.9 |
Jul-Sep 11 |
1,528 |
36.8 |
5.7 |
57.4 |
31.1 |
38.7 |
5.1 |
56.3 |
33.6 |
Oct-Dec 11 |
1,450 |
38.9 |
5.7 |
55.4 |
33.3 |
38.4 |
4.2 |
57.5 |
34.2 |
Jan-Mar 12 |
|
|
|
|
|
38.0 |
4.2 |
57.8 |
33.8 |
‘Increase’ in working capital finance is optimistic. |
Table 11: Assessment & Expectations for Availability of Finance |
(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 |
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 |
1,524 |
32.1 |
8.3 |
59.6 |
23.8 |
36.4 |
4.0 |
59.6 |
32.3 |
Apr-Jun 11 |
1,504 |
30.2 |
8.7 |
61.1 |
21.5 |
32.6 |
5.3 |
62.2 |
27.3 |
Jul-Sep11 |
1,528 |
24.0 |
12.0 |
64.0 |
12.1 |
30.0 |
5.8 |
64.2 |
24.2 |
Oct-Dec 11 |
1,450 |
24.1 |
13.7 |
62.2 |
10.4 |
28.7 |
8.5 |
62.7 |
20.2 |
Jan-Mar 12 |
|
|
|
|
|
28.2 |
9.1 |
62.7 |
19.0 |
‘Improvement’ in Availability of finance is optimism. |
III.2.3 Cost of External Finance The perception about rise in the cost of funds remained strong in the assessment quarter. The survey results reveal that 53.4 per cent of the respondents feel that cost of external fund have risen during October- December 2011 (Table 12). However, one quarter ahead outlook signals slight reversed in sentiment about cost of funds. III.2.4 Cost of Raw Material The pressure from cost of raw material (CR) continued to increase in the assessment quarter and expected to elevate further in the next quarter. 66.3 per cent of respondents have reported further increase in cost of raw material in assessment quarter. Similarly 54.1 per cent of the respondents expected the cost of raw material to rise further in the expectation quarter (Table 13, Chart 10).
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 |
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-Dec10 |
1,561 |
4.0 |
37.9 |
58.1 |
-33.9 |
3.8 |
32.1 |
64.2 |
-28.3 |
Jan-Mar 11 |
1,524 |
3.5 |
46.0 |
50.6 |
-42.5 |
3.7 |
35.0 |
61.3 |
-31.3 |
Apr-Jun 11 |
1,504 |
3.5 |
52.5 |
44.1 |
-49.0 |
3.9 |
38.9 |
57.1 |
-35.0 |
Jul-Sep 11 |
1,528 |
3.5 |
53.7 |
42.9 |
-50.2 |
4.0 |
43.7 |
52.4 |
-39.7 |
Oct-Dec 11 |
1,450 |
2.9 |
53.4 |
43.7 |
-50.6 |
3.4 |
44.4 |
52.2 |
-41.0 |
Jan-Mar 12 |
|
|
|
|
|
4.1 |
42.8 |
53.1 |
-38.8 |
Cost of external finance ‘Decrease’ is optimistic. |
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 |
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 |
1,524 |
1.7 |
73.7 |
24.6 |
-71.9 |
2.3 |
55.9 |
41.8 |
-53.6 |
Apr-Jun 11 |
1,504 |
4.5 |
70.0 |
25.6 |
-65.5 |
2.5 |
59.5 |
38.0 |
-57.0 |
Jul-Sep 11 |
1,528 |
5.3 |
63.3 |
31.4 |
-58.1 |
4.8 |
56.6 |
38.6 |
-51.7 |
Oct-Dec 11 |
1,450 |
5.1 |
66.3 |
28.7 |
-61.2 |
3.7 |
53.4 |
42.9 |
-49.7 |
Jan-Mar 12 |
|
|
|
|
|
4.0 |
54.1 |
41.9 |
-50.1 |
Cost of raw material ‘Decrease’ is optimistic. |
III.2.5 Selling Price The survey seeks responses on change in selling prices (SP) (ex-factory unit prices) of the manufactured products on aggregate basis. Despite a large percentage of respondents reporting cost pressure of raw material and interest, only about 24.6 per cent of them could increase the selling price over the previous quarter. Similar situation is expected in the next quarter as well (Table 14, Chart 10). III.2.6 Profit margin The survey seeks opinion of manufacturing companies on change in profit margin (gross profits as percentage to net sales). Around half of the respondents perceived ‘no change’ in profit margin, net response on increase in profit margin declined in both the quarters under review (Table 15 and Chart 11). This may be indication of lower pricing power in the manufacturing sector.
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 |
1,180 |
19.4 |
19.2 |
61.4 |
0.2 |
17.2 |
17.2 |
65.6 |
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 |
1,524 |
35.7 |
9.2 |
55.1 |
26.5 |
26.7 |
8.1 |
65.2 |
18.6 |
Apr-Jun 11 |
1,504 |
35.0 |
13.4 |
51.6 |
21.5 |
30.6 |
7.0 |
62.4 |
23.7 |
Jul-Sep 11 |
1,528 |
27.3 |
16.6 |
56.1 |
10.7 |
29.1 |
10.7 |
60.2 |
18.3 |
Oct-Dec 11 |
1,450 |
24.6 |
15.7 |
59.7 |
8.9 |
26.8 |
10.8 |
62.4 |
16.0 |
Jan-Mar 12 |
|
|
|
|
|
25.0 |
10.3 |
64.7 |
14.7 |
Selling price ‘Increase’ is optimistic. |
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 |
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 |
1,524 |
20.8 |
25.1 |
54.1 |
-4.3 |
25.6 |
17.2 |
57.2 |
8.3 |
Apr-Jun 11 |
1,504 |
18.2 |
28.1 |
53.6 |
-9.9 |
22.2 |
18.4 |
59.4 |
3.8 |
Jul-Sep 11 |
1,528 |
15.2 |
32.3 |
52.5 |
-17.1 |
22.0 |
19.5 |
58.5 |
2.5 |
Oct-Dec 11 |
1,450 |
15.2 |
32.5 |
52.4 |
-17.3 |
20.3 |
21.9 |
57.8 |
-1.6 |
Jan-Mar 12 |
|
|
|
|
|
20.1 |
23.1 |
56.8 |
-2.9 |
| ‘Increase’ in Profit margin is optimistic. |
III.3 Overall Business Situation III.3.1 Overall Business Situation The overall business situation is a parameter that captures the overall confidence of manufacturing companies. The net response of the overall business situation for assessment quarter further declined to 17.7 per cent from 18.7 per cent in the previous quarter. The net response for expectation quarter also showed similar trend (Table 16, Chart 12).
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 |
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 |
1,524 |
46.0 |
7.4 |
46.6 |
38.6 |
54.2 |
4.1 |
41.8 |
50.1 |
Apr-Jun11 |
1,504 |
42.8 |
10.1 |
47.1 |
32.6 |
47.0 |
5.6 |
47.4 |
41.4 |
Jul-Sep 11 |
1,528 |
34.1 |
15.4 |
50.5 |
18.7 |
46.6 |
6.8 |
46.6 |
39.8 |
Oct-Dec 11 |
1,450 |
35.2 |
17.5 |
47.3 |
17.7 |
43.1 |
8.0 |
48.9 |
35.2 |
Jan-Mar 12 |
|
|
|
|
|
43.6 |
10.0 |
46.5 |
33.6 |
Overall Business Situation ‘Better’ 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. BEI has marginally increased to 110.1 from 109.3 for assessment quarter while it declined to 117.2 from 118.8. (Table 17 Chart 13). A value of BEI above 100 can be considered as positive assessment/outlook on the business sentiment. III.3.3 Industry-wise and Size-wise Analysis Industry-wise analysis shows that majority of the industry groups was more pessimistic about input cost and less optimistic about profit margin. However, ‘Food products’, ‘Cement‘, ‘Electrical machinery’ and ‘Pharmaceuticals’ industries reported optimism in demand conditions.
Table-17: Business Expectation Index based on Assessment and Expectations |
Quarter |
Assessment |
Expectations |
Index |
Change over previous quarter |
Change over previous year |
Index |
Change over previous quarter |
Change over previous year |
Jan-Mar 00 |
122.8 |
- |
- |
|
- |
- |
Apr-Jun 00 |
115.2 |
-7.6 |
- |
125.5 |
- |
- |
Jul-Sep 00 |
116.1 |
0.9 |
- |
126.1 |
0.6 |
- |
Oct-Dec 00 |
113.9 |
-2.2 |
- |
124.4 |
-1.7 |
- |
Jan-Mar 01 |
115.2 |
1.3 |
-7.6 |
122.5 |
-1.8 |
- |
Apr-Jun 01 |
109.9 |
-5.3 |
-5.3 |
120.7 |
-1.8 |
-4.8 |
Jul-Sep 01 |
108.7 |
-1.3 |
-7.4 |
118.9 |
-1.8 |
-7.2 |
Oct-Dec 01 |
100.7 |
-8.0 |
-13.2 |
119.5 |
0.6 |
-4.9 |
Jan-Mar 02 |
108.4 |
7.7 |
-6.8 |
105.3 |
-14.2 |
-17.3 |
Apr-Jun 02 |
110.8 |
2.4 |
0.9 |
112.3 |
7.0 |
-8.5 |
Jul-Sep 02 |
113.2 |
2.4 |
4.5 |
116.7 |
4.4 |
-2.2 |
Oct-Dec 02 |
113.8 |
0.6 |
13.1 |
121.2 |
4.6 |
1.7 |
Jan-Mar 03 |
118.4 |
4.6 |
10.0 |
119.7 |
-1.6 |
14.4 |
Apr-Jun 03 |
109.8 |
-8.6 |
-1.0 |
117.8 |
-1.8 |
5.6 |
Jul-Sep 03 |
114.3 |
4.5 |
1.1 |
117.2 |
-0.7 |
0.5 |
Oct-Dec 03 |
119.8 |
5.4 |
5.9 |
122.1 |
4.9 |
0.8 |
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 |
|
|
|
117.2 |
-1.6 |
-8.7 |
 |
Size-wise analysis shows that there was higher optimism for demand conditions for bigger size companies (Annual Production of `10 billion and above) as compared with their smaller counterpart; however, these companies were less optimistic on financial conditions (Table 18). 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 October- December 2011. Major constraints reported are lack of domestic demand, shortage of power, shortage of working capital finance and uncertainty in economic environment. Industry-wise break-up reveals that companies in the industry groups, viz, Textiles and Basic metals felt higher production as compared to other industries. (Table 19).
Table 18: Size-wise analysis: Annual Production and Paid-up Capital (PUC) for Assessment quarter
(Net response in per cent) |
Parameter |
PUC-wise |
Production-wise |
Small |
Medium |
Big |
Small |
Medium |
Big |
Round 55 |
Round 56 |
Round 55 |
Round 56 |
Round 55 |
Round 56 |
Round 55 |
Round 56 |
Round 55 |
Round 56 |
Round 55 |
Round 56 |
Overall business situation |
20.7 |
18.8 |
36.9 |
16.9 |
36.3 |
25.6 |
33.6 |
15.3 |
36.4 |
21.6 |
42.4 |
12.1 |
Overall Financial situation |
16.4 |
10.9 |
27.6 |
10.3 |
31.1 |
24.4 |
23.7 |
7.8 |
28.6 |
15.2 |
27.1 |
8.9 |
Working Capital Finance Requirement |
22.0 |
27.9 |
34.9 |
34.5 |
33.0 |
30.2 |
28.9 |
28.1 |
37.4 |
39.2 |
32.2 |
40.0 |
Availability of Finance |
7.9 |
10.9 |
21.9 |
10.6 |
14.3 |
7.0 |
16.9 |
8.7 |
23.4 |
14.5 |
33.3 |
2.1 |
Cost of external finance |
-30.1 |
-36.9 |
-41.7 |
-51.8 |
-42.2 |
-57.0 |
-34.5 |
-40.7 |
-45.5 |
-55.0 |
-43.1 |
-66.0 |
Production |
26.9 |
19.1 |
41.2 |
24.9 |
40.4 |
41.9 |
37.2 |
19.4 |
41.5 |
27.8 |
37.9 |
35.6 |
Order Books |
27.0 |
14.2 |
33.9 |
17.6 |
37.3 |
38.6 |
32.5 |
14.9 |
33.9 |
20.5 |
27.8 |
22.6 |
Pending Orders, if applicable |
14.7 |
15.6 |
7.1 |
13.1 |
7.2 |
-3.0 |
10.5 |
16.3 |
5.6 |
10.2 |
-2.0 |
7.4 |
Cost of raw materials |
-56.7 |
-65.9 |
-48.8 |
-60.8 |
37.4 |
-57.6 |
-54.7 |
-63.3 |
-45.6 |
-59.1 |
-47.5 |
-61.6 |
Inventory of raw materials |
-4.9 |
-5.7 |
-5.1 |
-7.4 |
0.0 |
-8.3 |
-1.8 |
-2.6 |
-8.0 |
-10.8 |
-1.8 |
-10.1 |
Inventory of Finished Goods |
-3.7 |
-5.0 |
-6.4 |
-9.2 |
2.2 |
-10.8 |
-4.1 |
-4.2 |
-7.8 |
-12.1 |
-10.3 |
-13.0 |
Capacity utilisation |
6.7 |
9.3 |
23.3 |
10.1 |
26.4 |
23.5 |
18.0 |
5.9 |
24.3 |
14.5 |
23.7 |
13.9 |
Level of capacity utilisation |
-1.8 |
-5.5 |
0.0 |
-6.3 |
-7.7 |
3.5 |
-4.9 |
-13.1 |
3.9 |
1.1 |
0.0 |
-4.2 |
Assessment of the production capacity |
6.2 |
0.6 |
7.6 |
3.4 |
11.0 |
0.0 |
4.3 |
-1.2 |
9.9 |
5.0 |
10.3 |
8.4 |
Employment in the company |
6.7 |
11.5 |
16.7 |
11.6 |
7.7 |
7.0 |
7.4 |
7.5 |
19.6 |
13.0 |
1.7 |
17.9 |
Exports, if applicable |
9.8 |
2.5 |
23.3 |
12.7 |
26.0 |
8.7 |
14.0 |
4.9 |
27.9 |
15.9 |
30.8 |
16.2 |
Imports, if any |
6.9 |
2.5 |
18.2 |
12.4 |
20.2 |
14.5 |
13.6 |
5.8 |
19.7 |
14.5 |
18.5 |
18.4 |
Selling prices |
14.2 |
5.5 |
16.0 |
8.8 |
21.8 |
16.7 |
13.5 |
3.8 |
17.7 |
12.1 |
25.9 |
14.1 |
If increase expected in selling prices, rate of such increase |
13.6 |
17.9 |
17.4 |
20.0 |
5.5 |
22.7 |
17.5 |
20.7 |
16.5 |
17.1 |
20.5 |
28.1 |
Profit Margin |
-16.1 |
-18.2 |
-0.7 |
-18.4 |
5.6 |
0.0 |
-7.4 |
-21.8 |
2.0 |
14.8 |
-5.2 |
-11.2 |
• 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 to `1 billion).
• Big companies (annual production above `10 billion / PUC above `1 billion). |
Table 19: Constraints for attaining the normal production level Industry-wise |
|
Production Constraint |
NO |
YES |
Count |
per cent |
Count |
per cent |
Food Products |
63 |
45.7 |
75 |
54.3 |
Textiles |
62 |
33.0 |
126 |
67.0 |
Basic Metals And Metal Products |
87 |
42.2 |
119 |
57.8 |
Electrical Machinery |
48 |
50.0 |
48 |
50.0 |
Other Machinery And Apparatus |
94 |
53.1 |
83 |
46.9 |
Transport Equipment |
45 |
47.4 |
50 |
52.6 |
Fertilizers |
20 |
62.5 |
12 |
37.5 |
Pharmaceutical And Medicines |
66 |
66.7 |
33 |
33.3 |
Basic Chemicals |
58 |
58.0 |
42 |
42.0 |
Rubber And Plastic Products |
38 |
48.1 |
41 |
51.9 |
Paper And Paper Products |
19 |
46.3 |
22 |
53.7 |
Cement |
16 |
44.4 |
20 |
55.6 |
Wood And Wood Products |
12 |
63.2 |
7 |
36.8 |
Diversified |
14 |
70.0 |
6 |
30.0 |
Other Industries |
75 |
60.5 |
49 |
39.5 |
All companies |
717 |
49.4 |
733 |
50.6 |
III.3.5 Survey Results and Official Statistics Chart 14 shows that the movements of annual growth rates of quarterly GDP-Manufacturing, IIP Manufacturing (Base 2004-05) and the BEI based on assessment and expectations. It is observed that BEI has captured most of the turning points of the official statistics.
 |
Statement 1: Assessment and Expectation of the Industrial Performance for
October-December 2011 and January-March 2012 |
(Percentage of responding companies)# |
Parameter |
Assessment |
Expectations |
Optimistic (Positive) |
Pessimistic (Negative) |
No Change |
Net response (Col. 2 - Col. 3) |
Optimistic (Positive) |
Pessimistic (Negative) |
No Change |
Net response (Col. 6 - Col. 7) |
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
(9) |
1 |
Overall business situation |
35.2 |
17.5 |
47.3 |
17.7 |
43.6 |
10.0 |
46.5 |
33.6 |
2 |
Overall Financial situation |
28.1 |
16.9 |
55.0 |
11.2 |
35.3 |
10.2 |
54.5 |
25.2 |
3 |
Working Capital Finance Requirement |
38.9 |
5.7 |
55.4 |
33.3 |
38.0 |
4.2 |
57.8 |
33.8 |
4 |
Availability of Finance |
24.1 |
13.7 |
62.2 |
10.4 |
28.2 |
9.1 |
62.7 |
19.0 |
5 |
Cost of external finance |
2.9 |
53.4 |
43.7 |
-50.6 |
4.1 |
42.8 |
53.1 |
-38.8 |
6 |
Production |
42.2 |
16.9 |
41.0 |
25.3 |
49.8 |
9.5 |
40.7 |
40.4 |
7 |
Order Books |
36.9 |
18.5 |
44.6 |
18.4 |
42.3 |
11.0 |
46.7 |
31.3 |
8 |
Pending Orders, if applicable |
17.5 |
5.0 |
77.5 |
12.6 |
13.7 |
6.5 |
79.8 |
7.3 |
9 |
Cost of raw materials |
5.1 |
66.3 |
28.7 |
-61.2 |
4.0 |
54.1 |
41.9 |
-50.1 |
10 |
Inventory of raw materials |
7.1 |
14.4 |
78.5 |
-7.3 |
5.0 |
12.3 |
82.7 |
-7.3 |
11 |
Inventory of Finished Goods |
6.3 |
15.1 |
78.6 |
-8.9 |
5.2 |
12.0 |
82.8 |
-6.8 |
12 |
Capacity utilisation |
26.9 |
16.1 |
56.9 |
10.8 |
34.5 |
10.2 |
55.3 |
24.3 |
13 |
Level of capacity utilisation |
12.7 |
18.3 |
69.0 |
-5.6 |
13.6 |
12.7 |
73.8 |
0.9 |
14 |
Assessment of the production capacity |
11.3 |
8.5 |
80.2 |
2.8 |
12.1 |
7.4 |
80.5 |
4.7 |
15 |
Employment in the company |
18.9 |
7.6 |
73.5 |
11.3 |
19.3 |
5.7 |
75.0 |
13.6 |
16 |
Exports, if applicable |
26.8 |
15.3 |
57.9 |
11.5 |
29.0 |
10.4 |
60.6 |
18.6 |
17 |
Imports, if any |
20.8 |
9.3 |
69.9 |
11.6 |
23.0 |
7.5 |
69.4 |
15.5 |
18 |
Selling prices |
24.6 |
15.7 |
59.7 |
8.9 |
25.0 |
10.3 |
64.7 |
14.7 |
19 |
If increase expected in selling prices, rate of such increase |
27.6 |
7.6 |
64.8 |
19.9 |
24.9 |
9.1 |
65.9 |
15.8 |
20 |
Profit Margin |
15.2 |
32.5 |
52.4 |
-17.3 |
20.1 |
23.1 |
56.8 |
-2.9 |
# Due to rounding off, percentages may not add up to 100. |
Statement 2: Net responses on Assessment of Industrial Performance over last
9 quarterly rounds of Industrial Outlook Survey |
Parameter |
Optimistic Response |
Oct-Dec 2009 (1256) |
Jan-Mar 2010 (1079) |
Apr-Jun 2010 (1092) |
Jul-Sep 2010 (1403) |
Oct-Dec 2010 (1561) |
Jan-Mar 2011 (1524) |
Apr-Jun 2011 (1504) |
Jul-Sep 2011 (1528) |
Oct-Dec 2011 (1450) |
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
(9) |
(10) |
(11) |
1 |
Overall business Situation |
Better |
36.0 |
43.1 |
40.7 |
38.7 |
45.9 |
38.6 |
32.6 |
18.7 |
17.7 |
2 |
Overall Financial situation |
Better |
29.5 |
35.8 |
32.2 |
30.6 |
37.1 |
27.1 |
24.1 |
11.7 |
11.2 |
3 |
Working Capital Finance Requirement |
Increase |
28.8 |
30.5 |
29.9 |
29.3 |
37.1 |
36.9 |
35.7 |
31.1 |
33.3 |
4 |
Availability of Finance |
Improve |
23.0 |
25.7 |
26.4 |
26.6 |
30.3 |
23.8 |
21.5 |
12.1 |
10.4 |
5 |
Cost of external finance |
Decrease |
-14.7 |
-15.9 |
-21.9 |
-28.3 |
-33.9 |
-42.5 |
-49.0 |
-50.2 |
-50.6 |
6 |
Production |
Increase |
28.9 |
36.5 |
35.4 |
40.0 |
43.9 |
41.4 |
32.1 |
22.6 |
25.3 |
7 |
Order Books |
Increase |
25.9 |
31.9 |
31.3 |
36.1 |
37.9 |
34.7 |
28.1 |
20.3 |
18.4 |
8 |
Pending Orders, if applicable |
Below normal |
11.6 |
8.8 |
6.9 |
5.1 |
3.9 |
5.5 |
6.5 |
13.3 |
12.6 |
9 |
Cost of raw materials |
Decrease |
-47.1 |
-60.2 |
-62.7 |
-58.3 |
-63.9 |
-71.9 |
-65.5 |
-58.1 |
-61.2 |
10 |
Inventory of raw materials |
Below average |
-4.2 |
-5.8 |
-5.0 |
-5.3 |
-6.2 |
-7.8 |
-5.7 |
-6.6 |
-7.3 |
11 |
Inventory of Finished Goods |
Below average |
-4.3 |
-4.3 |
-4.1 |
-4.3 |
-3.9 |
-6.5 |
-7.0 |
-9.5 |
-8.9 |
12 |
Capacity utilisation |
Increase |
16.5 |
21.7 |
21.1 |
23.3 |
27.9 |
27.4 |
17.2 |
9.9 |
10.8 |
13 |
Level of capacity utilisation |
Above normal |
-3.9 |
3.0 |
2.5 |
3.1 |
5.6 |
4.9 |
-0.7 |
-6.4 |
-5.6 |
14 |
Assessment of the production capacity |
More than
adequate |
5.3 |
6.4 |
3.1 |
3.3 |
2.9 |
4.4 |
4.3 |
5.2 |
2.8 |
15 |
Employment in the company |
Increase |
10.3 |
13.7 |
14.7 |
18.7 |
19.4 |
18.7 |
18.2 |
15.6 |
11.3 |
16 |
Exports, if applicable |
Increase |
9.2 |
12.7 |
15.3 |
20.0 |
23.1 |
18.9 |
18.2 |
13.1 |
11.5 |
17 |
Imports, if any |
Increase |
13.0 |
17.1 |
20.9 |
22.0 |
20.9 |
19.9 |
17.6 |
15.7 |
11.6 |
18 |
Selling prices |
Increase |
2.6 |
12.4 |
17.3 |
13.8 |
20.2 |
26.5 |
21.5 |
10.7 |
8.9 |
19 |
If increase expected in selling prices, rate of such increase |
Increase at
lower rate |
19.3 |
21.6 |
17.4 |
15.2 |
15.2 |
12.1 |
14.8 |
21.0 |
19.9 |
20 |
Profit Margin |
Increase |
-9.9 |
-2.9 |
-4.8 |
-2.5 |
-0.4 |
-4.3 |
-9.9 |
-17.1 |
-17.3 |
Note: Figures in bracket represent number of companies covered in the survey. |
Statement 3: Net responses on Expectations of Industrial Performance over last
9 quarterly rounds of Industrial Outlook Survey |
Parameter |
Optimistic Response |
Jan-Mar 2010 (1256) |
Apr-Jun 2010(1079) |
Jul-Sep 2010(1092) |
Oct-Dec 2010(1403) |
Jan-Mar 2011(1561) |
Apr-Jun 2011(1524) |
Jul-Sep 2011(1504) |
Oct-Dec 2011(1528) |
Jan-Mar 2012 (1450) |
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
(9) |
(10) |
(11) |
1 |
Overall business Situation |
Better |
44.9 |
41.2 |
41.5 |
47.5 |
50.1 |
41.4 |
39.8 |
35.2 |
33.6 |
2 |
Overall Financial situation |
Better |
39.3 |
36.3 |
34.1 |
39.6 |
41.1 |
33.4 |
30.6 |
26.3 |
25.2 |
3 |
Working Capital Finance Requirement |
Increase |
32.7 |
27.7 |
31.1 |
34.8 |
37.8 |
32.9 |
33.6 |
34.2 |
33.8 |
4 |
Availability of Finance |
Improve |
29.2 |
26.8 |
28.5 |
31.3 |
32.3 |
27.3 |
24.2 |
20.2 |
19.0 |
5 |
Cost of external finance |
Decrease |
-18.3 |
-20.6 |
-23.3 |
-28.3 |
-31.3 |
-35.0 |
-39.7 |
-41.0 |
-38.8 |
6 |
Production |
Increase |
40.0 |
35.9 |
40.2 |
49.1 |
48.6 |
40.0 |
40.6 |
39.9 |
40.4 |
7 |
Order Books |
Increase |
35.8 |
33.4 |
36.3 |
44.8 |
44.0 |
38.4 |
35.9 |
33.4 |
31.3 |
8 |
Pending Orders, if applicable |
Below normal |
5.7 |
6.5 |
4.2 |
1.5 |
1.7 |
3.9 |
4.5 |
7.6 |
7.3 |
9 |
Cost of raw materials |
Decrease |
-44.3 |
-48.6 |
-49.3 |
-49.3 |
-53.6 |
-57.0 |
-51.7 |
-49.7 |
-50.1 |
10 |
Inventory of raw materials |
Below average |
-3.6 |
-2.6 |
-5.1 |
-6.6 |
-5.6 |
-3.3 |
-2.9 |
-5.2 |
-7.3 |
11 |
Inventory of Finished Goods |
Below average |
-1.9 |
-2.6 |
-5.0 |
-2.8 |
-3.0 |
-2.9 |
-3.1 |
-6.5 |
-6.8 |
12 |
Capacity utilisation |
Increase |
25.4 |
19.7 |
26.5 |
32.3 |
33.1 |
24.0 |
25.0 |
22.2 |
24.3 |
13 |
Level of capacity utilisation |
Above normal |
1.3 |
1.6 |
5.8 |
7.2 |
9.5 |
4.4 |
4.3 |
0.3 |
0.9 |
14 |
Assessment of the production capacity |
More than adequate |
5.0 |
7.1 |
4.1 |
5.6 |
3.4 |
5.0 |
5.3 |
7.4 |
4.7 |
15 |
Employment in the company |
Increase |
12.1 |
13.6 |
16.8 |
21.0 |
20.6 |
17.4 |
19.4 |
16.5 |
13.6 |
16 |
Exports, if applicable |
Increase |
20.2 |
18.5 |
20.7 |
26.1 |
26.3 |
24.0 |
25.8 |
22.1 |
18.6 |
17 |
Imports, if any |
Increase |
16.9 |
17.1 |
21.7 |
22.2 |
21.3 |
18.9 |
19.0 |
16.9 |
15.5 |
18 |
Selling prices |
Increase |
9.8 |
13.3 |
15.2 |
17.0 |
18.6 |
23.7 |
18.3 |
16.0 |
14.7 |
19 |
If increase expected in selling prices, rate of such increase |
Increase at
lower rate |
16.8 |
19.7 |
14.3 |
13.0 |
13.1 |
9.6 |
13.1 |
16.2 |
15.8 |
20 |
Profit Margin |
Increase |
1.1 |
3.2 |
3.1 |
9.2 |
8.3 |
3.8 |
2.5 |
-1.6 |
-2.9 |
| Note: Figures in bracket represent number of companies covered in the survey. |
 |
 |
 |
|
