Industrial Outlook
Industrial Outlook is an economic indicator that measures the degree of optimism or pessimism that manufacturing companies feel about the overall business climate. It is a widely-used economic indicator, which serves as a barometer of the health of the economy from the perspective of the businesses. When business confidence in the economy is high, they make higher investments, manufacture more and save less. When confidence is low, businesses tend to be more conservative and spend less.
The business confidence is measured through a quarterly Industrial Outlook Survey (IOS) conducted by the Reserve Bank of India (RBI). The survey obtains information on business sentiments and captures qualitative responses on nine indicators - production, order books, pending orders, capacity utilization, exports, imports, employment. For each round of the survey, approx. 800-1,000 businesses are canvassed around India.
The IOS responses are measured through two indexes:
- Business Assessment Index (BAI) - Business sentiment about current business and job market conditions as compared to a quarter ago
- Business Expectations Index (BEI) - Expectations about business climate in the next quarter
Industrial Outlook is an economic indicator that measures the degree of optimism or pessimism that manufacturing companies feel about the overall business climate. It is a widely-used economic indicator, which serves as a barometer of the health of the economy from the perspective of the businesses. When business confidence in the economy is high, they make higher investments, manufacture more and save less. When confidence is low, businesses tend to be more conservative and spend less.
The business confidence is measured through a quarterly Industrial Outlook Survey (IOS) conducted by the Reserve Bank of India (RBI). The survey obtains information on business sentiments and captures qualitative responses on nine indicators - production, order books, pending orders, capacity utilization, exports, imports, employment. For each round of the survey, approx. 800-1,000 businesses are canvassed around India.
The IOS responses are measured through two indexes:
- Business Assessment Index (BAI) - Business sentiment about current business and job market conditions as compared to a quarter ago
- Business Expectations Index (BEI) - Expectations about business climate in the next quarter
SUBJECT Variables
BUSINESS ASSESSMENT INDEX (BAI)
- The business assessment index (BAI) decreased to 108.3 in Q2 '24-25 from 110.8 in the previous quarter, maintaining the positivity in the overall business sentiments in the Indian manufacturing sector.
- Manufacturing companies reported higher optimism on demand conditions during Q2 '24-25, as reflected in their assessment of production, order books, and capacity utilization.
BUSINESS EXPECTATIONS INDEX (BEI)
- The business expectations index (BEI) remained in the optimist territory while increasing to 120.3 for Q3 '24-25 from 119.1 for the previous quarter
- Manufacturers maintained their optimism for Q3 '24-25, as reflected in their improved expectations on production, order books, capacity utilization, and overall business situation.
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