Business confidence in India subdued in June: Survey

According to the IHS Markit Business Outlook survey, just 20% of Indian businesses expect growth in output over the next 12 months, unchanged from February.

business Updated: Jul 16, 2018 15:39 IST
Press Trust of India
Press Trust of India
Press Trust of India, New Delhi
Business confidence in India,India business,business activity
At the sector level, while Indian manufacturing companies signalled a stronger degree of positive sentiment, service providers were less upbeat.(Hindustan Times Media)

Business sentiment in India regarding future activity remained subdued in June amid intense competition, high fuel prices and strong cost pressures, says a survey.

According to the IHS Markit Business Outlook survey, just 20% of Indian businesses expect growth in output over the next 12 months, unchanged from February.

The business confidence reading for India was below the average recorded for BRIC (Brazil, Russia, India and China) nations at 23% and globally at 31% globally.

The threats to the 12-month outlook are centred on uncertainty surrounding policy decisions, intense competition, high fuel prices and strong cost pressures, the survey noted.

“Latest survey data highlights that business confidence regarding future activity in India remains unchanged from February and is slightly weaker than the average for BRIC nations,” said Aashna Dodhia, Economist at IHS Markit.

Dodhia further noted, “sentiment surrounding new business and revenue expectations is at the highest level seen since October 2016, as survey respondents forecast further improvements in client demand and market conditions”.

At the sector level, while Indian manufacturing companies signalled a stronger degree of positive sentiment, service providers were less upbeat.

Meanwhile, hiring intentions remained positive in June particularly in the manufacturing sector. Besides raising staff numbers, Indian companies intend to increase their investment spending to expand capacity.

“Also, although Indian companies expressed concerns that high oil prices may fuel inflationary pressures, the survey signals that this has not deterred company plans to expand capacity in the year ahead, as hiring intentions and capex plans were both revised up in June,” Dodhia said.

First Published: Jul 16, 2018 15:39 IST