Business confidence falls sharply in March quarter: Survey

25 May 2015
NEW DELHI: Business sentiment fell sharply in the March quarter due to concerns over investment climate amid “patchy” and “uneven growth” said a survey today.
“The 92nd round of Business Expectations Survey (BES) carried out in March 2015 reveals that business sentiment has fallen sharply. The BCI decreased by 6.9 per cent over the previous quarter” said a survey by economic think tank National Council of Applied Economic Research (NCAER).
All components of BCI (Business Confidence Index) declined between January and April NCAER said.
The downturn in (as against December qtr) sentiments about the macro economy is a matter of concern said Bornali Bhandari Fellow NCAER.
“Declining sentiments about the investment climate is worrisome in the background of a patchy and uneven growth in 2014­15 and does not foretell improvement investment scenario in 2015­16” Bhandari said.
As per the survey all sectors barring consumer durables registered a drop in BCI over the last quarter with services showing the largest fall (13.6 pc) followed by capital goods at 13.1 per cent.
The consumer durables sector registered a marginal rise of 0.8 per cent over the previous quarter.
The survey further said the disaggregation of responses by firm size also exhibits pervasive gloomy sentiments.
The BCI of Rs 100 to 500 crore firms declined the most 9.2 per cent followed by less than Rs 1 crore firms whose BCI declined by 8.6 per cent.
“The only group that showed a marginal increase…is the Rs 10 to 100 crore firms whose BCI increased 0.4 per cent” the survey said. Sentiments regarding production domestic sales exports imports of raw materials and pre­tax profits are mixed it said.
While sentiment regarding sales and exports was subdued ­­ with larger firms not expecting an increase in either ­­ sentiments regarding production was discouraging it said.
The survey further said that trend of a continuous rise in the Political Confidence Index (PCI) was reversed in April when PCI fell 8.9 per cent over the last quarter.
Components of PCI showed mixed results with only two improving while six deteriorating.
NCAER Business Expectations Survey (BES) tracks business sentiment of over 500 Indian companies.
Published in: : The Economic TimesBusiness Standard, 25 May 2015