CII Business Confidence Survey
Business optimism soars among India Inc: CII Business Confidence Index rises to a two-quarter high
Industry remains sanguine on domestic economic prospects
India’s economic growth has held up well despite global challenges. Economic momentum has gained speed post the general elections. Industry is buoyed by the policy continuity, which got mirrored in the recent print of the CII Business Confidence Index which soared to a two-quarter high of 68.2 in the second quarter of the current financial year (July-September), as compared to 67.3 in the previous quarter and 67.1 in the corresponding quarter last year.
In tandem with the improvement seen in the business prospects, industry has responded positively on the availability of employment opportunities across sectors. Almost half of the respondents anticipate an improvement in the hiring situation in their companies during the second quarter.
Industry is sanguine on the business sentiments as exhibited by the upward trajectory seen in the CII Business Confidence Index which surged to a two-quarter high in July-September period. The upcoming festive season portends well for fortifying growth prospects further. That said, the uncertainty in the global scenario persists, necessitating a careful watch on the evolving economic conditions, said CII, in the press release.
The survey respondents cited factors such as improvement in consumption, especially rural demand; steady progress in monsoon; continued emphasis on reforms and fresh sightings in private investment as the key reasons which will drive growth in the current financial year. Indeed, more than half (59 per cent) of the respondents anticipate an improvement in private capex in H1FY25 as compared to H2FY24. This is encouraging as this is likely to provide support to public capex which has shown an uptick recently after a lull in the first quarter due to elections.
The upbeat prognosis on private investment is attributable to an improvement in domestic demand. The latter got mirrored in the survey result which highlighted that more than half of the respondents anticipate sales and count of new orders in their companies to increase in the July-September quarter. Consequently, most of the respondents (46 per cent) feel that the capacity utilisation levels in their company would range between 75-100 per cent during the quarter ending September 2024. This level is higher than the proportion witnessing such capacity utilisation levels in the previous quarter. Moreover, capacity utilisation between 75-80 per cent is a propitious sign as it helps to fuel fresh investments in the economy as per the RBI.
A few niggling business concerns have been highlighted by the respondents in the survey with protracted geopolitical tensions, spike in global commodity prices and slowing external demand being the top three ones.
The 128th round of CII Business Outlook Survey was conducted in the month of September 2024, covering more than 200 firms of varying sizes and across all industry sectors and regions.
5 October 2024
New Delhi