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MNI India Business Sentiment Eases in November

39% of Businesses Say Modi Government's Policies Are Helping
MNI
2014-11-24 12:21 1534

SINGAPORE, Nov. 24, 2014 /PRNewswire/ -- The MNI India Business Indicator, calculated from the responses of more than 400 BSE listed companies, declined by 1.1% to 68.9 in November from 69.7 in October, with demand falling as the festival season came to a close.

Business confidence eased for the second consecutive month to the lowest since August, although it was 6.7% above the level seen a year ago, signifying that sentiment remains buoyant. In November, business confidence eased across all sectors with service sector companies leading the modest fall in sentiment.

In answer to a special question, 39% of respondents thought that the policies of Modi's government have had a positive impact on their business. A significant proportion highlighted the quicker implementation and clearance of business proposals by the government as the primary reason for the improvement. Nevertheless, 45.6% of our panel reported that their business had been unaffected by the government's policies, while just under 2% thought that they have had a negative impact.

In line with the easing in overall business confidence this month, there was a decline in some of the key indicators within the report. New Orders and Order Backlogs fell following the end of the festival season. On a positive note, a growing number of companies reported lower input costs while a fifth of our panel responded that there was greater availability of credit.

Commenting on the latest survey, Chief Economist of MNI Indicators Philip Uglow said, "Business sentiment fell a little in November but remains at a relatively high level. While Indian businesses generally have a positive outlook, we've yet to see a significant pick up in output or orders. We need to see a clear recovery here before we can say that the recovery is entrenched."

"The global drop in oil prices has come at a good time for India and will help to boost growth as well as cap inflation. Monetary policy looks set to remain on hold over the short-term but a slightly lower profile for inflation over 2015 should enable the RBI to reduce official interest rates before the second half of next year."

For further information, please contact:
Naomi Pickens
Public Relations    
naomi.pickens@deutsche-boerse.com
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Editorial Content:
Philip Uglow
Chief Economist, MNI Indicators

Notes to Editors

Please source all information to MNI Indicators.

MNI India Business Sentiment is a monthly poll of Indian business executives at companies listed on BSE (formerly known as the Bombay Stock Exchange). Companies are a mix of manufacturing, service, construction and agricultural firms.

Respondents are asked their opinion on whether a particular business activity has increased, decreased or remained the same compared with the previous month as well as their expectations for three months ahead, e.g. is Production higher/same/lower compared with a month ago?

Diffusion indicators are then calculated by adding the percentage share of positive responses to half the percentage of those respondents reporting no change. An indicator reading above 50 shows expansion, below 50 indicates contraction and a result of 50 means no change.

Data is collected via telephone interviews. More than 400 companies are surveyed each month.

About MNI Indicators

MNI Indicators, part of Deutsche Borse Group, offers unique macro-economic data and insight to businesses and the investment community. We produce data and intelligence that is unbiased, pertinent and responsive. Our data moves markets.

For more information, visit our website at www.mni-indicators.com.

Source: MNI
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