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Indian Risk Climate: D&B Business Optimism Index Falls by 21.7%

Mumbai India: The Dun & Bradstreet Composite Business Optimism Index stands at 143.6 during Q3 2011, a decrease of 4.2% as compared to Q3 2010. On a q-o-q basis, the index recorded a decrease of 21.7%. Based on the responses received, it was observed that each of the six optimism indices – namely, Volume of Sales, Net Profits, Selling Prices, New Orders, Inventory Levels and Employee Levels have registered a decrease as compared to Q2 2011.

“The subdued domestic and international economic activity, coupled with high inflation and hardening interest rates may have adversely affected the business sentiment, as is evident from the 21.7% decline in the Business Optimism Index. The Indian corporate sector’s subdued confidence regarding profit expectations hints towards the impending pressure on business margins in the quarter ahead. Despite rising cost pressures, majority of the survey respondents do not expect to change selling prices in the near future, given lower demand expectations. The expected slowdown in hiring activity is a reflective of the uncertainty prevailing in the business environment, where companies are likely to adopt a wait and watch policy. Further, the uncertain domestic political scenario coupled with the ongoing turmoil on the global front such as the prevalence of the sovereign debt crisis in the Euro region, movement in international crude oil prices and the weak recovery in the US are expected to adversely affect the overall economic growth in the near future” said Kaushal Sampat, President & CEO, Dun & Bradstreet – India.

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Source:  D&B India

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