Indian business confidence, sales prospects looking up for next six months

Overall business confidence index rose to a six quarter high of 67.3% which was 62.8% in the last survey by Federation of Indian Chambers of Commerce and Industry (FICCI).

In the October business confidence survey, which is based on enterprises' assessment of production and current position and expectations of industry analysts received optimistic views.

“The proportion of respondents citing a ‘moderately to substantially better’ performance in the current conditions vis-à-vis last six months noted an increase at all the three levels – economy, industry and firm level,” the report said.

Image Source: FICCI survey

64.1% and 69% of respondents were optimistic over current industry conditions and near future expectations respectively. This was higher than 58.5% and 65% who cited positive outcomes in these categories respectively.

Sales prospects among the companies that participated were up at 62% as they said they that they foresee higher sales over the coming six months.

This was higher as compared to 55% who were optimistic about sales in the last round.

"Higher disposable income in hands of consumers along with the onset of festive season is expected to drive sales," the report said.

Other operational parameters of the companies like investments, employment and profit outlook by the industries were also higher than the preceding round.

Image Source: FICCI survey

On the investment front, a marginal increase was noted in the proportion of respondents expecting an uptick in investments as 41% participants anticipated higher investments, the report said.

About 46% of the participants in the survey said that they have noted an improvement in investment activity in and around their area of operation, the report added.

However, the outlook on exports continued to be in the negative terrain as 32% of respondents anticipated exports to go up over the next two quarters which was lower than the previous round which was at 34%.   

With regard to hiring prospects, 31% of respondents in the latest round reported that they would consider hiring more people in the coming six months.

This is also an increase from the 29% respondents that stated an uptick in hiring in the last round.

However, a majority 56% of the participants did not foresee any fresh hiring over near term, the report said.