The Reserve Bank of India's latest surveys show capacity utilisation of the manufacturing sector rose to a two-and-a-half-year high of 72.4 in the last quarter of 2022. The latest improvement is noteworthy for two reasons. One, capacity utilisation is now firmly above levels that prevailed immediately before the pandemic struck. Second, the rise in capacity utilisation was underpinned by new orders rising 20.9 percent year-on-year. This is key as rising demand must push capacity utilisation above 75, which is widely regarded as the level that must be crossed for companies to start investing in greater capacity. As such, a private capital expenditure revival may not be that far away.