Positive Trends Highlighted in Latest CII Survey

Business confidence has seen a notable increase in the June to September quarter of this fiscal year, driven by reassurances of policy continuity following elections and an optimistic outlook on business prospects. According to the Confederation of Indian Industry (CII), this sentiment is based on a survey conducted among over 200 businesses across various sectors.

Confidence Index Hits 68.2 Amid Strengthening Domestic Demand

The CII’s Business Confidence Index rose to 68.2 in the September quarter, up from 67.3 in June and 67.1 during the same period last year. Although the current figure is slightly below the March quarter’s 68.3, it indicates a positive trajectory influenced by improved domestic demand.

Capital Expenditure Expectations Remain High

The survey revealed that 59% of respondents anticipate an uptick in private capital expenditure for the first half of the current financial year compared to the previous year, with a significant portion expecting it to remain unchanged. Additionally, over three-quarters of businesses predict consumer price inflation will remain below 5%, as evidenced by a CPI of 3.65% in August, compared to 6.83% a year prior.

Sales and Profit Outlooks Show Promising Trends

More than half of the businesses surveyed expect an increase in sales and new orders, while 45% forecast a rise in profits. Furthermore, 46% anticipate capacity utilization to fall between 75-100%, with some expecting to exceed full capacity in the upcoming quarter, reflecting growing operational confidence.

Hiring Prospects Brighten Amid Festive Season Anticipation

The CII’s findings suggest that nearly half of the businesses foresee an improvement in hiring during the second quarter. This optimism is partly attributed to the approaching festive season, which is expected to further enhance growth prospects.

Concerns Remain Amid Global Uncertainties

Despite the optimistic outlook, the CII cautions that uncertainties in global economic conditions merit careful monitoring. Concerns regarding ongoing geopolitical tensions, fluctuations in global commodity prices, and a slowdown in external demand could pose challenges ahead.

GDP Growth Projections Underline Economic Resilience

The economic survey for 2023-24 predicts a GDP growth rate of 6.5-7%, slightly below the Reserve Bank of India’s forecast of 7.2%. Policymakers are hopeful that increased public expenditure, favorable monsoon outcomes, and improved reservoir levels will support economic growth throughout the fiscal year.

As the business landscape evolves, the CII’s findings reflect a cautiously optimistic sentiment, indicating a readiness for growth amidst both opportunities and challenges in the coming months.