Business Confidence Index
The recently carried out survey by the CII signaled early signs of revival in business sentiments, the CII Business Confidence Index (CII-BCI) rose to 54.9 in the third quarter (October-December) from 45.7 for the July-September 2013 quarter, however, the finding strikes a note of caution as the downside risks to growth have still not abated and supply side bottlenecks continue to pose a problem the industry said adding that with some positive signals emanating from the global economy, which find a resonance in the improved export performance and is causing the current account deficit to decline and it shows that the slowdown in the domestic economy is slowly bottoming out., Director-General, Chandrajit Banarjee, said reiterating that he areas of concern is GDP growth in the current fiscal, which is expected to settle in the range of 4.5-5% accompanied by higher inflation.

He said adding that the survey is based on responses from over 174 industry members and the majority of respondents (63%) belong to large firms, 12% from medium-scale and 25% from mediums-scale and 25% from small-scale. Further, 65% of respondents were from the manufacturing sector, while 35% were from services. The study concluded that 58% of the respondents expect an increase in sales in the third quarter, higher than 45% in the previous quarter. Majority of the respondents expected input costs to increase. But, the silver lining is that the percentage of respondents who expect expenses on raw materials, electricity, and wages & salaries to increase had declined significantly from the last quarter. Against the backdrop of an expected improvement in sales growth and moderation in input costs, 43% of the increase in their pre-tax profit margins in the third quarter, higher than 31% in the last quarter. Alongside export prospects also look positive in the current quarter, according to the survey, as 53% firms expected their exports to rise in the current quarter, up from 49% in the last quarter, Similarly 56% respondents didn’t expect their imports to increase during the current quarter.