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The Reserve Bank of India (RBI) in its latest ‘Industrial outlook survey of the manufacturing sector for Q3:2023-24’ has said that manufacturing companies reported positive demand conditions during Q3:2023-24 as reflected in their assessment of production, capacity utilisation, pending orders, employment and overall business situation but they were less sanguine when compared to the previous survey round.

As per the report, the business assessment index (BAI) in the manufacturing sector moderated to 113.9 in Q3:2023-24 from 115.0 in the previous quarter. In Q3:2023-24, pressures from cost of raw material, financing cost and salary outgo are assessed to have marginally eased, while selling prices and profit margins are gauged to have gone up during the quarter, though the sentiments were somewhat tempered when compared to the assessment in the previous quarter.

The survey however noted that manufacturers remained optimistic on demand situation during Q4:2023-24, though the confidence was relatively lower when compared to the previous survey round. In Q4:2023-24, input costs are likely to increase, though the pressures are likely to be lower, while in synchrony with the positive demand prospects, selling prices and profit margin are expected to rise.