Industrial Outlook Survey of the Manufacturing Sector for Q2:2025-26

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Published on October 01, 2025

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Industrial Outlook Survey of the Manufacturing Sector for Q2:2025-26

Today, the Reserve Bank released the results of 111th round of its quarterly industrial outlook survey (IOS). The survey ¹ encapsulates qualitative assessment of the business climate by Indian manufacturing companies for Q2:2025-26 and their expectations for Q3:2025-26 as well as outlook on select parameters for the subsequent two quarters. A total of 1,106 companies responded in this round of the survey² conducted during July-September 2025.

Highlights:

A. Assessment for Q2:2025-26

Manufacturers indicated some moderation in demand conditions as compared to the previous quarter, as reflected in their assessment on production, order books and capacity utilisation (Table A).
Pressures from cost of raw material, financing cost and salary outgo were perceived to have eased; sentiments on growth in selling prices and profit margins moderated.
Business assessment index increased as compared with Q1:2025-26 (Chart 1).

B. Expectations for Q3:2025-26

Manufacturers retained a positive outlook on demand conditions for Q3:2025-26, albeit with some signs of moderation.
Cost pressures from raw materials and salary outgo are expected to ease, while growth in selling prices is likely to be higher.
Business expectations index remained steady in Q3:2025-26, reflecting sustained sentiment among manufacturers (Chart 1).

C. Expectations for Q4:2025-26 and Q1:2026-27

Manufacturers anticipate improved demand conditions in Q4:2025-26 and Q1:2026-27 (Table B).
Input cost pressures are likely to persist for manufacturers, they also expect pricing power to pass on higher costs through selling prices.

Table A: Summary of Net responses³ on Survey Parameters
(per cent)
Parameters	Assessment period		Expectation period
Parameters	Q1:2025-26*	Q2:2025-26	Q2:2025-26*	Q3:2025-26
Production	21.4	17.9	53.3	47.9
Order Books	19.9	14.8	52.1	45.7
Pending Orders	12.3	13.5	1.7	0.2
Capacity Utilisation	16.0	14.2	43.8	43.3
Inventory of Raw Materials	3.0	1.5	-12.1	-15.5
Inventory of Finished Goods	2.6	0.5	-12.5	-15.7
Exports	10.9	10.0	34.7	37.7
Imports	10.7	12.0	33.2	36.2
Employment	10.6	8.0	23.7	25.2
Financial Situation (Overall)	21.0	17.5	53.9	47.9
Availability of Finance (from internal accruals)	20.1	15.7	46.5	39.3
Availability of Finance (from banks & other sources)	16.4	11.5	40.7	34.8
Availability of Finance (from overseas, if applicable)	7.6	6.2	32.4	28.8
Cost of Raw Material	-46.6	-38.1	-54.9	-45.6
Cost of Finance	-7.2	-6.1	-12.5	-27.9
Salary/ Other Remuneration	-27.1	-12.7	-31.6	-29.9
Selling Price	6.8	2.4	23.8	24.1
Profit Margin	-5.0	-6.4	20.1	24.6
Overall Business Situation	18.0	18.0	51.5	49.3

Table B: Business Expectations on Select Parameters for extended period – Net response
(per cent)
Parameters	Round 110	Round 111
Parameters	Q2:2025-26	Q3:2025-26	Q4:2025-26	Q1:2026-27
Overall Business Situation	51.5	49.3	53.2	55.1
Production	53.3	47.9	53.5	56.2
Order Books	52.1	45.7	51.8	53.6
Capacity Utilisation	43.8	43.3	50.5	49.6
Employment	23.7	25.2	31.3	32.4
Cost of Raw Materials	-54.9	-45.6	-52.0	-49.9
Selling Prices	23.8	24.1	31.3	32.0

Note: Please see the excel file for time series data

Table 1: Assessment and Expectations for Production
(Percentage responses)@
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	37.6	14.7	47.7	22.9	40.7	4.3	55.0	36.3
Q3:2024-25	42.4	16.2	41.5	26.2	40.5	4.3	55.2	36.3
Q4:2024-25	40.9	13.0	46.1	27.9	42.8	4.2	52.9	38.6
Q1:2025-26	33.6	12.1	54.3	21.4	41.4	4.6	54.0	36.9
Q2:2025-26	30.1	12.3	57.6	17.9	56.8	3.6	39.6	53.3
Q3:2025-26					50.5	2.6	47.0	47.9
‘Increase’ in production is optimistic.
@:Due to rounding off Percentage may not add up to 100.

Table 2: Assessment and Expectations for Order Books
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	35.3	15.8	48.9	19.5	39.4	4.2	56.3	35.2
Q3:2024-25	40.0	18.1	41.8	21.9	38.1	4.8	57.0	33.3
Q4:2024-25	38.2	13.8	48.0	24.4	41.6	4.7	53.7	36.8
Q1:2025-26	32.3	12.4	55.3	19.9	40.7	5.1	54.2	35.6
Q2:2025-26	27.9	13.1	59.0	14.8	56.1	3.9	40.0	52.1
Q3:2025-26					48.5	2.8	48.7	45.7
‘Increase’ in order books is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 3: Assessment and Expectations for Pending Orders
(Percentage responses)
Quarter	Assessment				Expectations
	Above Normal	Below Normal	Normal	Net response	Above Normal	Below Normal	Normal	Net response
	Above Normal	Below Normal	Normal	Net response	Above Normal	Below Normal	Normal	Net response
Q2:2024-25	3.1	11.1	85.8	8.0	4.2	6.0	89.8	1.8
Q3:2024-25	4.4	14.8	80.8	10.4	3.8	5.6	90.5	1.8
Q4:2024-25	4.9	11.1	84.0	6.2	4.5	11.6	83.9	7.1
Q1:2025-26	4.4	16.8	78.8	12.3	4.3	6.8	88.9	2.5
Q2:2025-26	3.4	17.0	79.6	13.5	3.5	5.2	91.4	1.7
Q3:2025-26					3.6	3.8	92.6	0.2
Pending orders ‘Below Normal’ is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 4: Assessment and Expectations for Capacity Utilisation (Main Product)
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	25.1	10.0	65.0	15.1	33.2	4.0	62.9	29.2
Q3:2024-25	29.9	12.5	57.6	17.4	33.4	3.9	62.6	29.5
Q4:2024-25	29.1	10.3	60.6	18.7	36.2	4.1	59.6	32.1
Q1:2025-26	27.4	11.4	61.2	16.0	35.4	4.4	60.1	31.0
Q2:2025-26	23.3	9.1	67.6	14.2	49.0	5.1	45.9	43.8
Q3:2025-26					45.8	2.5	51.7	43.3
‘Increase’ in capacity utilisation is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 5: Level of capacity utilisation (compared to the average in preceding 4 quarters)
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Above Normal	Below Normal	Normal	Net response	Above Normal	Below Normal	Normal	Net response
Q2:2024-25	14.9	8.1	77.0	6.8	13.1	4.7	82.2	8.4
Q3:2024-25	12.0	11.2	76.7	0.8	14.4	3.8	81.8	10.5
Q4:2024-25	10.9	8.5	80.6	2.3	12.5	4.4	83.0	8.1
Q1:2025-26	18.2	14.0	67.8	4.2	9.7	4.6	85.6	5.1
Q2:2025-26	20.1	14.3	65.6	5.8	18.8	5.1	76.1	13.7
Q3:2025-26					19.2	3.5	77.3	15.7
‘Above Normal’ in Level of capacity utilisation is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 6: Assessment and Expectations for Assessment of Production Capacity (with regard to expected demand in next 6 months)
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	More than adequate	Less than adequate	Adequate	Net response	More than adequate	Less than adequate	Adequate	Net response
Q2:2024-25	6.9	2.1	90.9	4.8	14.7	2.5	82.8	12.3
Q3:2024-25	8.8	3.7	87.5	5.0	12.8	1.5	85.7	11.3
Q4:2024-25	9.1	2.4	88.5	6.7	11.1	2.8	86.1	8.3
Q1:2025-26	9.0	10.2	80.8	-1.1	12.1	1.7	86.2	10.4
Q2:2025-26	8.5	10.8	80.7	-2.3	18.6	2.7	78.8	15.9
Q3:2025-26					18.7	2.8	78.4	15.9
‘More than adequate’ in Assessment of Production Capacity is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 7: Assessment and Expectations for Exports
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	18.4	13.2	68.4	5.3	29.2	4.4	66.4	24.8
Q3:2024-25	22.1	14.5	63.4	7.6	31.2	5.0	63.9	26.2
Q4:2024-25	23.0	9.5	67.6	13.5	29.2	4.9	65.9	24.2
Q1:2025-26	22.5	11.6	65.9	10.9	23.4	5.0	71.6	18.4
Q2:2025-26	21.8	11.8	66.5	10.0	38.8	4.0	57.2	34.7
Q3:2025-26					42.2	4.5	53.3	37.7
‘Increase’ in exports is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 8: Assessment and Expectations for Imports
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	17.6	8.5	73.8	9.1	25.7	3.0	71.3	22.8
Q3:2024-25	20.4	9.1	70.5	11.3	28.0	3.6	68.4	24.3
Q4:2024-25	19.0	6.8	74.3	12.3	26.6	2.7	70.7	23.9
Q1:2025-26	18.4	7.7	73.9	10.7	19.4	3.3	77.2	16.1
Q2:2025-26	18.9	7.0	74.1	12.0	36.2	3.0	60.8	33.2
Q3:2025-26					38.8	2.5	58.7	36.2
‘Increase’ in exports is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 9: Assessment and Expectations for level of Raw Materials Inventory
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Above average	Below average	average	Net response	Above average	Below average	average	Net response
Q2:2024-25	8.8	6.1	85.1	-2.7	10.7	2.3	87.0	-8.3
Q3:2024-25	11.0	5.0	84.0	-6.0	11.9	2.3	85.8	-9.6
Q4:2024-25	11.3	4.9	83.8	-6.4	9.8	2.3	88.0	-7.5
Q1:2025-26	7.9	10.9	81.2	3.0	11.0	2.3	86.7	-8.7
Q2:2025-26	9.6	11.1	79.3	1.5	14.9	2.9	82.2	-12.1
Q3:2025-26					16.7	1.3	82.0	-15.5
‘Below average’ Inventory of raw materials is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 10: Assessment and Expectations for level of Finished Goods Inventory
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Above average	Below average	average	Net response	Above average	Below average	average	Net response
Q2:2024-25	9.5	6.5	84.0	-3.0	10.3	2.6	87.1	-7.7
Q3:2024-25	11.9	5.1	83.0	-6.8	12.1	2.2	85.8	-9.9
Q4:2024-25	12.6	4.7	82.7	-7.9	11.1	2.2	86.8	-8.9
Q1:2025-26	8.5	11.1	80.4	2.6	10.9	1.7	87.4	-9.1
Q2:2025-26	10.7	11.1	78.2	0.5	15.3	2.9	81.8	-12.5
Q3:2025-26					17.5	1.7	80.8	-15.7
‘Below average’ Inventory of finished goods is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 11: Assessment and Expectations for Employment Outlook
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	15.9	6.2	77.9	9.7	17.7	2.1	80.2	15.6
Q3:2024-25	17.3	7.2	75.5	10.2	19.3	1.6	79.1	17.6
Q4:2024-25	17.4	5.4	77.2	12.0	18.0	1.2	80.8	16.7
Q1:2025-26	16.8	6.3	76.9	10.6	14.6	1.7	83.7	12.9
Q2:2025-26	15.8	7.8	76.4	8.0	25.4	1.8	72.8	23.7
Q3:2025-26					26.2	1.0	72.8	25.2
‘Increase’ in employment is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 12: Assessment and Expectations for Overall Financial Situation
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Better	Worsen	No change	Net response	Better	Worsen	No change	Net response
Q2:2024-25	37.5	11.9	50.6	25.6	44.7	2.5	52.8	42.2
Q3:2024-25	38.0	13.1	49.0	24.9	49.1	2.7	48.1	46.4
Q4:2024-25	37.0	10.1	52.9	27.0	44.8	3.0	52.2	41.9
Q1:2025-26	31.8	10.8	57.4	21.0	39.0	2.6	58.4	36.3
Q2:2025-26	28.8	11.3	59.8	17.5	57.0	3.0	40.0	53.9
Q3:2025-26					49.8	1.9	48.3	47.9
‘Better’ overall financial situation is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 13: Assessment and Expectations for Working Capital Finance Requirement
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	24.1	4.7	71.2	19.4	32.0	2.1	66.0	29.9
Q3:2024-25	26.9	6.5	66.6	20.3	32.4	1.2	66.5	31.2
Q4:2024-25	24.3	5.1	70.6	19.2	30.9	2.3	66.8	28.6
Q1:2025-26	21.0	4.5	74.5	16.4	25.5	2.7	71.8	22.9
Q2:2025-26	19.7	5.8	74.5	13.9	33.4	1.9	64.6	31.5
Q3:2025-26					34.1	1.5	64.4	32.6
‘Increase’ in working capital finance is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 14: Assessment and Expectations for Availability of Finance (from Internal Accruals)
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Improve	Worsen	No change	Net response	Improve	Worsen	No change	Net response
Q2:2024-25	23.5	5.4	71.1	18.1	33.0	1.2	65.9	31.8
Q3:2024-25	31.1	6.4	62.4	24.7	32.9	0.8	66.3	32.1
Q4:2024-25	27.8	5.5	66.6	22.3	35.8	1.3	62.9	34.6
Q1:2025-26	25.5	5.4	69.1	20.1	31.7	1.3	67.0	30.4
Q2:2025-26	21.0	5.3	73.7	15.7	47.8	1.3	50.8	46.5
Q3:2025-26					40.1	0.8	59.0	39.3
‘Improvement’ in availability of finance is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 15: Assessment and Expectations for Availability of Finance (from banks and other sources)
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Improve	Worsen	No change	Net response	Improve	Worsen	No change	Net response
Q2:2024-25	18.7	4.3	77.0	14.4	28.7	1.4	69.9	27.2
Q3:2024-25	23.5	4.5	72.0	18.9	27.4	0.7	72.0	26.7
Q4:2024-25	19.8	4.7	75.5	15.1	27.9	0.8	71.3	27.1
Q1:2025-26	20.3	3.9	75.8	16.4	23.0	1.3	75.7	21.7
Q2:2025-26	16.4	4.9	78.8	11.5	41.2	0.5	58.3	40.7
Q3:2025-26					35.4	0.6	64.1	34.8
‘Improvement’ in availability of finance is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 16: Assessment and Expectations for Availability of Finance (from overseas, if applicable)
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Improve	Worsen	No change	Net response	Improve	Worsen	No change	Net response
Q2:2024-25	9.4	4.3	86.4	5.1	18.1	1.2	80.7	16.9
Q3:2024-25	13.9	5.9	80.3	8.0	20.6	0.4	79.0	20.2
Q4:2024-25	8.5	4.7	86.8	3.8	19.0	1.0	79.9	18.0
Q1:2025-26	11.6	3.9	84.5	7.6	10.7	1.0	88.3	9.7
Q2:2025-26	11.7	5.5	82.9	6.2	32.9	0.5	66.5	32.4
Q3:2025-26					29.5	0.7	69.8	28.8
‘Improvement’ in availability of finance is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 17: Assessment and Expectations for Cost of Finance
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	14.3	4.1	81.6	-10.2	22.1	2.9	75.0	-19.2
Q3:2024-25	17.9	5.3	76.8	-12.6	22.2	2.0	75.8	-20.2
Q4:2024-25	14.3	3.6	82.1	-10.8	21.8	1.9	76.3	-19.9
Q1:2025-26	16.5	9.2	74.3	-7.2	15.5	2.7	81.8	-12.8
Q2:2025-26	14.5	8.4	77.1	-6.1	26.1	13.6	60.2	-12.5
Q3:2025-26					30.2	2.3	67.4	-27.9
‘Decrease’ in cost of finance is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 18: Assessment and Expectations for Cost of Raw Materials
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	44.5	5.8	49.8	-38.7	52.1	1.1	46.9	-51.0
Q3:2024-25	51.9	5.4	42.7	-46.5	49.2	1.6	49.3	-47.6
Q4:2024-25	50.7	3.5	45.8	-47.2	51.7	2.5	45.8	-49.2
Q1:2025-26	50.8	4.2	44.9	-46.6	41.6	1.6	56.8	-40.1
Q2:2025-26	42.1	4.1	53.8	-38.1	56.2	1.2	42.6	-54.9
Q3:2025-26					46.6	1.0	52.4	-45.6
‘Decrease’ in cost of raw materials is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 19: Assessment and Expectations for Salary/Other Remuneration
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	18.8	1.4	79.8	-17.4	26.7	0.6	72.7	-26.1
Q3:2024-25	18.8	1.3	79.9	-17.5	27.8	0.3	71.9	-27.4
Q4:2024-25	19.2	1.2	79.6	-18.0	23.4	0.4	76.3	-23.0
Q1:2025-26	29.3	2.2	68.5	-27.1	37.7	0.9	61.5	-36.8
Q2:2025-26	15.9	3.2	80.9	-12.7	32.1	0.5	67.3	-31.6
Q3:2025-26					30.7	0.7	68.6	-29.9
‘Decrease’ in Salary / other remuneration is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 20: Assessment and Expectations for Selling Price
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	10.9	10.7	78.4	0.2	20.3	3.1	76.5	17.2
Q3:2024-25	15.0	12.4	72.6	2.6	19.3	2.2	78.5	17.1
Q4:2024-25	14.1	9.6	76.3	4.4	19.0	3.9	77.0	15.1
Q1:2025-26	15.7	8.8	75.5	6.8	15.7	3.2	81.2	12.5
Q2:2025-26	13.2	10.8	76.0	2.4	26.4	2.6	71.1	23.8
Q3:2025-26					26.7	2.6	70.7	24.1
‘Increase’ in selling price is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 21: Assessment and Expectations for Profit Margin
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Increase	Decrease	No change	Net response	Increase	Decrease	No change	Net response
Q2:2024-25	12.2	22.4	65.4	-10.2	16.7	6.8	76.4	9.9
Q3:2024-25	12.4	25.2	62.4	-12.8	19.4	5.8	74.9	13.6
Q4:2024-25	10.8	20.3	69.0	-9.5	19.0	7.3	73.7	11.7
Q1:2025-26	12.0	17.0	70.9	-5.0	14.5	7.5	78.0	7.0
Q2:2025-26	11.9	18.3	69.8	-6.4	26.2	6.2	67.6	20.1
Q3:2025-26					28.9	4.3	66.9	24.6
‘Increase’ in profit margin is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 22: Assessment and Expectations for Overall Business Situation
(Percentage responses)
Quarter	Assessment				Expectations
Quarter	Better	Worsen	No change	Net response	Better	Worsen	No change	Net response
Q2:2024-25	39.7	13.3	47.0	26.3	47.4	2.5	50.1	45.0
Q3:2024-25	40.4	14.5	45.1	25.9	51.2	3.9	44.9	47.4
Q4:2024-25	40.7	12.3	46.9	28.4	48.6	3.1	48.3	45.4
Q1:2025-26	31.7	13.7	54.6	18.0	42.3	3.5	54.3	38.8
Q2:2025-26	29.7	11.7	58.6	18.0	56.7	5.2	38.2	51.5
Q3:2025-26					51.5	2.2	46.4	49.3
‘Better’ Overall Business Situation is optimistic. Footnote ‘@’ given in Table 1 is applicable here.

Table 23: Business Sentiments⁴
(Percentage responses)
Quarter	Business Assessment Index (BAI)	Business Expectations Index (BEI)
Q2:2024-25	108.3	119.1
Q3:2024-25	108.5	120.3
Q4:2024-25	110.4	120.0
Q1:2025-26	109.6	117.5
Q2:2025-26	110.6	126.2
Q3:2025-26		126.3

¹The survey results reflect the respondents’ views, which are not necessarily shared by the Reserve Bank.

²Results of the previous survey round were released on the Bank’s website on August 06, 2025.

³Net Response (NR) is the difference between the percentage of respondents reporting optimism and those reporting pessimism. It ranges between -100 to 100. Any value greater than zero indicates expansion/optimism and any value less than zero indicates contraction/pessimism. In other words, NR = (I – D), where I is the percentage response of ‘Increase/optimism’, and D is the percentage response of ‘Decrease/pessimism’ and E is the percentage response as ‘no change/equal’ (i.e., I+D+E=100). For example, increase in production is optimism whereas decrease in cost of raw material is optimism.

⁴For each survey round, two summary indices are computed – one based on assessment [viz., Business Assessment Index (BAI)] and another based on expectations [viz., Business Expectations Index (BEI)]. Each index is a composite indicator calculated as a simple average of nine business parameters, where each parameter is derived as a weighted net response, weights being the share of industry groups in gross value added (GVA). The nine parameters considered are: (1) overall business situation; (2) production; (3) order books; (4) inventory of raw material; (5) inventory of finished goods; (6) profit margins; (7) employment; (8) exports; and (9) capacity utilisation. BAI/BEI gives a snapshot of the business outlook in every quarter and takes values between 0 and 200, with 100 being the threshold separating expansion from contraction.