Optimism index down 19

The Asian Age.  | Sangeetha G

Business, In Other News

Among the 6 key indices, optimism for new orders and selling price was the lowest in over 18 years.

The Dun & Bradstreet Composite Business Optimism Index in Q4 2019 fell by 19.5 per cent compared to Q3 2019 and 29.1 per cent against Q4 2018. All the six optimism indices registered a decrease compared to Q3 2019.

Chennai: The Dun & Bradstreet Composite Business Optimism Index in Q4 2019 fell by 19.5 per cent compared to Q3 2019 and 29.1 per cent against Q4 2018. All the six optimism indices registered a decrease compared to Q3 2019.

The index stood at 56.4, against 70 in Q3 2019 and 79.5 in Q4 2018.

Among the six key indices, optimism for new orders and selling price was the lowest in over 18 years. Optimism for net sales and net profits was the lowest in nearly three years and two years respectively.

Optimism for net profits stood at 59 per cent — a decrease of 7 percentage points against Q3 2019. Optimism for new orders decreased 22 per cent and optimism for volume of sales was down 4 per cent.

Ninety per cent of the respondents expect no change in the selling price for Q4 2019 and 61 per cent anticipate no change in inventory level. Optimism in terms of size of workforce decreased 6 percentage points.

“Multiple other demand indicators are also performing poorly: vehicle sales, domestic air passenger traffic, petroleum consumption and rural wages. Moreover, the floods in many states during the monsoon appear to have impacted rural demand which had been already subdued. Internationally, concerns on the trade war and protectionist policies are reflected in the indices.  The government has taken measures to counter these economic headwinds, but our respondents are not seeing signs of revival as yet. We expect further action in the coming months,” said Manish Sinha, Managing Director, Dun and Bradstreet India,

Some of the other factors that seem to have led to decline in optimism are contraction of the Index of Industrial Production by 1.1 per cent in August 19, lowest since December 2012, decline in the capacity utilisation of manufacturing companies to 73.6 per cent in Q1 FY20, lowest in seven quarters, contraction of core Wholesale Price Index inflation and contraction of bank credit to micro and small companies.

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