India defies global downturn with rising business output forecast

Factory sentiment in India (30 per cent) recovered to a near two-and-a-half-year high. The global reading was at 20 per cent.

Survey participants listed advertising, brand recognition, machinery acquisitions, new product releases, capacity expansion, and positive demand trends as the key opportunities to the outlook. Several firms also reported plans to beat competitors' prices in order to increase market shares, as per S&P Global.

Forecasts that customer interest will remain positive over the course of the coming 12 months underpinned upbeat sentiment towards job creation at private sector companies in India. The net balance of firms planning to hire extra staff was equal at manufacturers (10 per cent).

Companies intend to increase their budgets for capital expenditure, with the composite net balance improving from 12 per cent at the start of the year to 16 per cent and outpacing the global average (10 per cent). Manufacturers led sentiment on this front.

Sentiment surrounding research and development spending was generally muted in June, with the net balance of optimists outstripping that of pessimists by only 2 per cent. June saw a downgrade among manufacturers (from 10 per cent to 4 per cent).

June data showed an improvement in the outlook for non-staff costs in India, with the net balance of companies predicting an increase registering at a two-year low of 8 per cent. This was the lowest reading seen out of the 12 nations for which comparable data are available. Downward revisions were noted at goods producers and services firms.

Similarly, the data showed lower net balances for staff costs in the manufacturing sector. At the composite level, the net balance slipped to 17 per cent, the lowest reading since October 2021. Globally, only the aggregate reading for China was below that for India.

That said, price-setting plans were revised higher in June, with the net balance of companies intending to hike their charges rising to 17 per cent. Manufacturers were particularly confident about pricing power, with the net balance increasing to its highest mark since February 2021.

There was a recovery in profits sentiment among private sector firms in India during June. The net balance of optimists outstripped that of pessimists by 18 per cent, compared with 15 per cent in February.

Fibre2Fashion News Desk (DP)