OBICUS Survey
The Order Books, Inventories and Capacity Utilization Survey (OBICUS) on the Manufacturing sector is published quarterly by the RBI. The survey covers various public and private limited companies in the manufacturing sector which voluntarily contribute information regarding their demand conditions. The information collected in the survey includes quantitative data on new orders received during the reference quarter, backlog of orders, pending orders, total inventories and capacity utilization.
The company level data collected during the survey are treated as confidential and never disclosed. The survey results are considered as important indicators to measure economic activity, inflationary pressures and the overall business cycle.
The Order Books, Inventories and Capacity Utilization Survey (OBICUS) on the Manufacturing sector is published quarterly by the RBI. The survey covers various public and private limited companies in the manufacturing sector which voluntarily contribute information regarding their demand conditions. The information collected in the survey includes quantitative data on new orders received during the reference quarter, backlog of orders, pending orders, total inventories and capacity utilization.
The company level data collected during the survey are treated as confidential and never disclosed. The survey results are considered as important indicators to measure economic activity, inflationary pressures and the overall business cycle.
SUBJECT Variables
ORDER BOOKS
- Sequential growth (quarter-on-quarter) in new orders, increased by 3.5% in Q2 '23-24 after a 1.3% decrease in Q1 '23-24.
- On a year-on-year (YoY) basis, the order book grew by 7.3% in Q2 '23-24 in comparison to 1.5% in Q1 '23-24.
SALES & INVENTORIES
- Finished goods inventory (FGI) to sales ratio increased to 24.6% during Q2 '23-24 in comparison to 24.8% in the previous quarter.
- Raw material inventory (RMI) to sales ratio increased to 30.9% in Q2 '23-24 compared to 29.3% in the previous quarter.
CAPACITY UTILIZATION
Capacity utilization refers to the manufacturing and production capabilities utilized by a nation at any given time. It is the relationship between the output produced with the given resources and the potential output that can be produced if capacity was fully used. It provides an insight into the total utilization of manufacturing resources available. Economists use this metric as an indicator of inflationary pressures. If market demand increased, it will raise the capacity utilization rate. A low capacity utilization rate will result in price decrease given insufficient demand for the produced goods.
Many capitalist economies face high capacity rates raising the ire of many economists due to its symbolization of capitalism. It is generally felt that that there will never be complete capacity utilization in an economy as there are bound to be inherent inefficiencies in resource allocation.
TO READ THE FULL ARTICLE
Get full access to the exciting content on The Mirrority by logging in
Support independent journalism
Even the very best of media houses in our country today are yielding to the pressure of click-bait journalism in order to survive. More than ever before, our country needs journalism that is independent, fair and non-pliant to the bureaucracy. Such journalism needs the support of like-minded readers like you to help us survive editorially and financially.
Whether you live in India or India lives inside you, help us continue to produce quality journalism with your contribution.
CONTRIBUTE