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Optimism for new orders at 10-year low: Report

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New Delhi | Wednesday, 2019 4:45:05 AM IST
The optimism for new orders in the third quarter of calender year 2019 among Indian businesses across segments is at 10-year low, according to D&B Business Optimism Index.

The report by data and analytics firm Dun & Bradstreet showed that the Composite Business Optimism Index for July-September declined 10.7 per cent quarter-on-quarter. On the year-on-year basis, the index registered a 13.1 per cent decline.

The report attributed the lower optimism to the ongoing liquidity crisis in the non-banking financial companies (NBFCs), slowdown in the automobile and the FMCG spaces and the crisis in the Indian aviation sector as well as the global trade concerns.

Trade slowdown and rising trade barriers had created difficulties for the corporate sector, it added.

"Slowdown in demand in the automobile segment has added to the problems in the sector and also impacted sales in the FMCG segment. Thus the business optimism survey results reveal optimism over new order at a 10-year low, selling price at a 17-year low and net sales at a 2-year low," it said.

As per the report, the government's push towards electric mobility has raised concerns over disruption in the automobile industry along with supply chain that comprises largely of MSMEs.

Many players had already invested in upgrade to meet the BS-VI emission norms, it said.

"Slowdown in demand in the automobile segment has added to the problems in the sector and also impacted sales in the FMCG segment," the report observed.

The Index was prepared by taking into consideration sub-indices of sales volumes, selling prices, new orders, employee numbers and net profits. It did not take into account the sub-index of inventory, the report said.

On Monday, an IHS Markit report said the business sentiment in India in June fell to the lowest level since 2016 as companies were worried over a subdued economy, government policies, regulation and water shortages.

"Falling from +18 per cent in February to +15 per cent in June, the net balance of private sector companies foreseeing output growth in the year ahead matches the June 2016 reading and therefore is the joint lowest since aggregate data became available in October 2009," the IHS Markit report said.

--IANS rrb-rv/pcj

( 374 Words)

2019-07-16-22:46:05 (IANS)

 
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