Economy
Are companies investing, and is capacity filling up?
Investment is growing and factories are busier. Capital-goods production grew 16.9% over the year to Aug 2026.
Written for readers following India's investment cycle. Readings assessed on 25 Oct 2026.
Investment is growing and factories are busier
Spending on fixed assets grew 11.9% in real terms in Q1 FY27. This includes investment by companies, households and government. Fixed investment added 4.0 percentage points to GDP growth of 7.8% in Q1 FY27.
Factories used 76.3% of capacity in Q1 FY27, after the RBI's seasonal adjustment. That compares with 75.2% in Q4 FY26. Fuller factories can give firms a reason to expand, though they can also raise output without building a new plant.
Listed private non-financial companies' sales grew 19.4% over the year to Q1 FY27. Operating profit grew 19.3% over the year to Q1 FY27. Sales are measured in rupees, so their growth also reflects changing prices.
Manufacturers' assessment index was 104.4 in Q2 FY27, on the optimistic side of neutral. These measures help locate the investment cycle. They do not identify how much private companies alone are spending on new assets.
usual range: the middle half of all readings latest Neutral Each line runs from the lowest reading to the highest. Each reading sits against its own history. Lockdown and rebound observations are excluded from the ranges; GDP uses only the new base. Production ranges span the marked base changes.
This month
Capital-goods production grew 16.9% over the year to Aug 2026. Infrastructure and construction goods grew 6.4% over the year to Aug 2026.
This cycle
Factories used 76.3% of capacity in Q1 FY27, after the RBI's seasonal adjustment. That compares with 75.2% in Q4 FY26. At current prices, fixed investment was 31.7% of GDP in FY26. This annual share is broader than corporate capex.
This decade
Seasonally adjusted capacity use had a median of 74.2% within the past decade. A fuller factory can meet extra demand by adding shifts, improving processes or investing.
How full are factories?
Factory use, orders and the investment test
Factories used 76.3% of capacity in Q1 FY27, after the RBI's seasonal adjustment. That compares with 75.2% in Q4 FY26.
How much factory capacity is being used
RBI manufacturing survey, quarterly, % of capacity.
How to read it. A higher line means surveyed factories are using more of their capacity. Seasonal adjustment removes the usual quarterly pattern; it can revise past readings.
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The registered historical test did not support the expected positive link between fuller factories and later investment. The capacity page reports both GDP-base results.
Is demand for investment goods growing?
National investment, production and finance
Capital-goods production grew 16.9% over the year to Aug 2026.
Production of machinery and construction goods
Monthly growth on a year earlier, %. Gaps mark missing data; lines break at base changes.
How to read it. These goods go into investment projects. Output can differ from domestic investment because trade and inventories also matter.
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Are company sales and profits keeping up?
Sales, operating margins and debt service
Listed private non-financial companies' sales grew 19.4% over the year to Q1 FY27.
Sales and operating profit growth
Listed private non-financial companies, quarterly, % on a year earlier.
How to read it. Compare profit growth with sales growth. Both are in current rupees and use matched companies within each comparison.
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How do businesses describe conditions?
Manufacturing, services and infrastructure surveys
Manufacturers' assessment index was 104.4 in Q2 FY27, on the optimistic side of neutral.
Manufacturers' view of current conditions
RBI Industrial Outlook Survey, quarterly index.
How to read it. Above neutral means optimism overall. The index summarises responses from manufacturers; it is not a growth rate or a measure of actual spending.
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What the numbers can't tell you
- Investment includes more than companies
- National fixed investment includes housing, public infrastructure and corporate assets. Neither the national total nor industrial production isolates private corporate capex.
- Factory surveys cover their respondents
- OBICUS covers manufacturing firms that respond to the RBI. Respondent numbers and composition change. Seasonal adjustment can revise earlier readings, and services capacity is outside this factory measure.
- The accounting base matters
- GDP and industrial-production revisions change coverage and measurement. GDP bases stay separate here; industrial growth is calculated within each base, with changes marked on the chart.
- Listed companies are only one part of business
- The company panel excludes financial firms, government companies and unlisted businesses. Matched-company growth reduces sample-change distortions within a release; it does not make a fixed or economy-wide panel.
- Opinions and lending are supporting evidence
- An optimistic response is not an investment order. Bank borrowing pays for working capital as well as assets, while investment may be financed from retained profits or other sources.
What changed
Each comparison uses the previous available reading, dated below. Some gaps can span more than a release.
| Measure | Previous observation | Now | Change |
|---|---|---|---|
| Factory use | 75.2% (Q4 FY26) | 76.3% (Q1 FY27) | up 1.1 percentage points |
| Investment growth | 10.5% (Q4 FY26) | 11.9% (Q1 FY27) | up 1.4 percentage points |
| Operating margin | 15.4% (Q4 FY26) | 16.4% (Q1 FY27) | up 1.0 percentage points |
| Business assessment | 100.4 (Q1 FY27) | 104.4 (Q2 FY27) | up 3.9 index points |
| Capital-goods growth | 19.0% (Jul 2026) | 16.9% (Aug 2026) | down 2.1 percentage points |
The workings
The question
Data
Each measure keeps its own period. Charts of the RBI's own readings hide table and download controls. Bundles are listed in data status.