India : FICCI Business Confidence Index hits a new low

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FICCI Business Confidence Index hits a new low

28
Apr '08

The high interest rate regime, appreciating rupee, and the rising cost of industrial inputs and raw materials have conspired to give corporate India's confidence level a hard knock.

Fifty per cent of the companies participating in FICCI's latest Business Confidence Survey have reported that overall economic conditions have deteriorated over the last six months compared with 19% in the last survey.

The expectations of the industry with regard to overall economic conditions in the coming six months are also not very optimistic.

While 38% believe that the current economic situation will be maintained over the next six months, close to a third feel that things would turn worse and the situation would further weaken.

The silver lining in the survey is the fact that nearly 54% of the participating firms have reported that their investments are likely to increase in the coming six months.

This figure is much higher when compared to the corresponding figure of 33% obtained in the previous survey. Further, this improvement in the investments index is largely due to the higher reported investments by members from the heavy industry.

The moderation in the assessment made by the participating companies about performance particularly at the economy and at the industry level is reflected in the movement of the confidence indices computed by FICCI.

The values of the three indices computed by FICCI, which had declined to a five year low in the last survey, have further moved down in the present survey.

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