Business confidence inched up in September quarter: industry survey

New Delhi: Enterprise confidence inched up within the June to September quarter of this fiscal amid assurances of coverage continuity after elections and enhancements in enterprise prospects, business physique Confederation of Indian Business (CII) stated quoting a survey of over 200 companies from throughout sectors.

Enchancment in enterprise sentiment was famous amongst particular person operations, the broader business and total financial system. 

The survey report stated higher home demand led to the business physique’s enterprise confidence index enhancing to 68.2 within the September quarter, up from 67.3 within the June quarter. The index was at 67.1 within the September quarter of the final fiscal. 

To make certain, the extent of enterprise confidence within the September quarter this yr is a tad decrease than that seen within the March quarter of FY24, when it stood at 68.3. 

The most recent survey confirmed 59% of the companies interviewed anticipated an enchancment in personal capital expenditure within the first half of the present monetary yr, from the yr in the past interval. A major third of the companies anticipated it to remain unchanged.

Greater than three-fourths of companies count on client worth inflation to be decrease than 5% within the present fiscal. Shopper worth index (CPI) primarily based inflation in August was at 3.65%, in comparison with 6.83% in the identical time a yr in the past.

Greater than half the companies surveyed anticipated an enchancment in gross sales and new orders within the September quarter, whereas 45% anticipated an increase in revenue and 46% anticipated their capability utilization to be within the vary of 75-100%. About 6% anticipated greater than full capability utilization within the September quarter, up from the precise 3% seen within the June quarter.

“Enchancment in home demand has created a extra optimistic enterprise atmosphere, encouraging firms to take a position and broaden,” stated the survey report.

Virtually half of the respondents anticipate an enchancment within the hiring scenario of their firms in the course of the second quarter, the business physique stated in a press release, including that the upcoming festive season portends effectively for fortifying progress prospects additional. 

Considerations

Nevertheless, the business physique acknowledged uncertainty in world financial circumstances warranted a cautious watch. It flagged protracted geopolitical tensions, a spike in world commodity costs and slowing exterior demand as considerations. The survey was held in September. 

About 45% of the respondents anticipated their earnings to enhance in September quarter, a tad greater than the 42% who skilled the same pattern within the June quarter this fiscal. A 3rd of the companies felt earnings to remain regular.

Practically 17% of the respondents felt that enchancment in consumption, particularly rural demand, was poised to considerably bolster financial progress within the present monetary yr, the survey report stated.

The financial survey for 2023-24 had projected a GDP progress price of 6.5-7% within the present monetary yr, a tad decrease than the 7.2% forecast by the RBI. Coverage makers are pinning hopes on improved public expenditure within the remaining a part of the monetary yr, improved monsoon, autumn and winter crops and replenished reservoir ranges for supporting financial progress this fiscal.