Biz optimism falls over 19% amid demand slowdown

Corporate India is forecasting deteriorating growth for October-December period this year as optimism for new orders and sales prices has hit the lowest level in nearly 18 years, a report said on Friday.

The Dun & Bradstreet Composite Business Optimism Index stood at 56.4 for December quarter this year, registering a decline of 19.5 per cent as compared to the year-ago period.

The Index fell sharply with India Inc forecasting deteriorating growth. "Optimism for new orders and sales prices are the lowest in nearly 18 years indicating the severity of the slowdown in demand," said Manish Sinha, Managing Director – India, Dun & Bradstreet.

Sinha further said multiple other demand indicators like vehicle sales, domestic air passenger traffic, petroleum consumption and rural wages have performed poorly.

Moreover, floods in many states during the monsoon appear to have impacted rural demand which had been already subdued. Globally, concerns on the trade war and protectionist policies are reflected in the indices, he noted.

"The government has taken measures to counter these economic headwinds, but our respondents are not seeing signs of revival as yet. We expect further actions in the coming months," Sinha said.

The report noted that optimism for net profits stood at 59 per cent - a decline of 7 percentage points as compared to the September quarter 2019. Optimism for new orders stood at 35 per cent - down 22 percentage points as against the previous quarter.

The Dun & Bradstreet Composite Business Optimism Index measures the pulse of the business community and serves as a benchmark for investors. It is arrived at on the basis of a quarterly survey of business expectations.