EconomyBusiness and investment
How full are factories, and does that precede investment?
Factories used 76.3% of capacity in Q1 FY27, after the RBI's seasonal adjustment. That compares with 75.2% in Q4 FY26.
Written for readers following Indian business and investment. Readings assessed on 25 Oct 2026.
Separate busy seasons from busier factories
Before seasonal adjustment, capacity use was 74.6% in Q1 FY27. Seasonal adjustment helps compare quarters with different production patterns.
Factory use before and after seasonal adjustment
RBI OBICUS survey, quarterly, % of capacity.
How to read it. The adjusted line removes the usual quarterly pattern. A gap between the lines can reflect seasonality rather than a lasting change in factory demand.
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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.
Are new orders growing?
New orders grew 14.3% on a year earlier in Q1 FY27. Orders describe demand for the surveyed factories' products.
New orders at surveyed factories
Quarterly growth on a year earlier, %.
How to read it. Orders above the year-earlier level point to stronger demand for these factories' products. Sample changes can affect the aggregate.
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How much stock are factories carrying?
Inventories were 66.1% of sales in Q1 FY27. A rise can reflect goods waiting to be sold or stocks built ahead of demand.
Inventories against sales
Quarterly, total inventories as % of sales.
How to read it. The ratio rises when inventories grow faster than sales. It does not distinguish an unwanted stock build-up from deliberate preparation for demand.
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Did fuller factories precede faster investment?
The registered test asks whether capacity use adds information about later investment growth, after accounting for growth already observable. The GDP bases are tested separately.
2011-12 GDP base: does not pass. 40 usable quarters, from Q4 FY12 to Q3 FY25.
A percentage point of fuller capacity was associated with −1.20 percentage points of later investment growth. The uncertainty interval runs from −2.23 to −0.10.
The expected positive relationship did not clear the bar set before calculation. Our prediction for this base was wrong.
2022-23 GDP base: untestable. 11 usable quarters, from Q4 FY23 to Q2 FY26.
The history is too short for the registered test. The prediction that this base would have too few quarters was supported.
This uses revised history and assumed publication lags. It tests an association, with capacity observed before the outcome quarter; it does not establish causation or a real-time forecasting record.
Capacity is allowed only after a conservative publication delay. The outcome is the first complete quarter starting after that decision date. Lockdown and rebound paths are excluded; the method records the exact rule and uncertainty calculation.
The rule written before calculation (C95) · Full method and limitations
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.
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.