The CII Business Confidence Index (CII- BCI) has shown an apparent uptick in the October-December 2022 quarter, indicating the optimism Indian industry has in the country’s economic resilience at a time when global economic growth is witnessing headwinds due to the tightening financial conditions and geopolitical tensions. The index rose to the level of 67.6 during the quarter, up from 62.2 in the previous July-September 2022 quarter, the apex industry chamber said in a statement.
The 121st Business Outlook Survey, conducted during November-December 2022 saw the participation of more than 120 firms of varying sizes across all industry sectors and regions of the country. While 73% of the survey respondents expect only a moderate impact of the global slowdown on the Indian economy, 86% believe that the government’s focus on infrastructure is the biggest positive for the Indian economy, followed by an improvement in tax collections and good consumption recovery.
The survey also saw 90% of the respondents say their company’s investment cycle will recover during the next financial year, with around 52% expecting the recovery during the first half of the next fiscal while about 37% of them foreseeing a pickup in investments by the second half of the year. This result is further strengthened by the fact that half of the survey respondents feel that the capacity utilisation levels in their companies would range between 75-100% during the Oct-Dec quarter. With a resumption of business activity, expectations for the Oct-Dec quarter have improved as the majority of the respondents anticipate an increase in sales (60%) and a count of new orders (55%).
Consequently, the profit outlook for the quarter has strengthened as nearly half of the respondents (47%) foresee an increase in profit margins, despite the majority of them indicating high input costs.
Nonetheless, input price pressures, though still elevated, have moderated from the previous fiscal, with 51% of the respondents expecting raw material costs to remain elevated during the Oct-Dec quarter as compared to 59% in the last quarter.
A majority (70%) of the survey respondents expect the Indian economy to expand in a range of 6.5% to 7.5% this fiscal as against 8.7% in the last fiscal. The estimate is in line with the official estimate that India’s GDP will grow by 7% during the current fiscal. The industry expects growth to moderate further in the next year on global headwinds.