Reserve Bank released the results of 107th round of its quarterly industrial outlook survey (IOS) yesterday. Manufacturing companies reported some moderation in demand expansion during Q2:2024-25 as reflected in their assessment on production, order books, capacity utilisation, employment and overall business situation. Pressures from cost of raw material, financing cost and salary outgo were assessed to have tempered and, in accordance, sentiments on growth in selling prices and profit margins also moderated. The business assessment index (BAI) remained in expansion zone but moderated to 108.3 in Q2:2024-25 from 110.8 in the previous quarter.
RBI noted that manufacturers maintained their optimism on demand conditions during Q3:2024-25. Cost of financing and salary outgo are likely to rise. Pressures from raw material cost are expected to ease, and selling price growth momentum may continue. The business expectations index (BEI) improved to 120.3 in Q3:2024-25 from 119.1 in the previous quarter. Manufacturers also have better expectations on production, order books, employment, capacity utilisation and overall business situation during Q4:2024-25 and Q1:2025-26.
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