CII Northern Region Business Outlook Survey.
According to the CII Northern Region Business Outlook Survey the overall outlook for business is better for the current six months (October - March 2009 -10) vis-à-vis actual performance for the last six months (April –September 09). The sentiment for recovery is strong with 22% of the respondents saying that recovery is already underway.
The Survey is based on 134 responses received from industry across the UT of Chandigarh and the states of Delhi, Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab, Rajasthan, Uttar Pradesh and Uttarakhand. 57% of the respondents were from the manufacturing sector and 43% from the services sector. 45%of the respondents were from small organizations, 38% from medium and 17% from large organizations. 17% of the respondents were from public sector organizations and balance 83% from private sector
97% of the respondents expect GDP growth in 5% plus range as against only 85% in the previous April-September 2009-10 survey. More than half the respondents expect the growth rate to be between 6-7% as against only 34% in the previous survey. This indicates a strong recovery sentiment for the Indian economy
86% of the respondents expect inflation to be below 5% suggesting that while there may be spikes in some commodity prices, inflationary risks remain low.
The survey also looked into the expectations on various elements that build up business confidence viz- Investments, Capacity Utilization, Sales, Availability and cost of credit etc. The results are encouraging with positive expectations across the spectrum. 51% of the respondents expect an increase in investments during the current six months, as against 33% in the previous survye. Capacity Utilization is expected to improve with 67% of the respondents expecting a capacity utilization of greater than 75% as against 42% of the respondents reporting a capacity utilization of more than 75% in the last six months. 73% of the respondents expect an increase in sales as against only 44% of the respondents reporting an increase in the last 6 months
64% of the respondents expect the value of production to increase as against only 38% reporting an increase in the last six months. The expected increase in production is supported by expected increase in new orders. 71% of the respondents expect an increase in orders as against only 40% reporting an increase in orders during the last 6 months
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Outlook on India’s exports, which according to experts are crucial for the country’s economic recovery, seems to be much better for the current six months. 51% of the respondents expected an increase in volume of exports as compared to 20% actually reporting an increase in the last six months.
The credit availability is also expected to improve. 32% of the respondents expect the credit availability to increase as against only 20% of the respondents reporting an increase in the last six months. However, a large proportion, 61%, of the respondents expect no change in the situation. No significant changes are expected in the cost of credit. Majority of the respondents, 57%, expect no change
The survey also asked the respondents about their main concerns. The average score of responses revealed that Global Economic Instability followed by Slackening Consumer Demand are the two most important concern areas. These are followed by High interest rates and Infrastructure and institutional shortages.
The clear priority that these scores throw up for Government action is the need for addressing infrastructure issues after having addressed issues relate