Soaring Business Optimism Among India's Corporate Sector in CII Business Confidence Survey
India's economy continues to show resilience despite global uncertainties, as indicated by the latest findings from the CII Business Outlook Survey. The surge in the CII Business Confidence Index reflects the industry's buoyant outlook on India's economic prospects.
The CII Business Confidence Index reached a two-quarter high of 68.2 in the second quarter of FY25, up from 67.3 in the previous quarter and 67.1 in the corresponding quarter of last year. This rise is driven by key factors such as policy continuity and post-election economic momentum.
The survey, conducted in September 2024, covered over 200 firms from various sectors and regions. Over half of the survey participants expect an increase in sales and new orders during the July-September quarter, and almost half of the respondents expect an improvement in hiring within their companies during the second quarter of FY25.
The positive hiring sentiments across sectors indicate a broader economic recovery in India. In fact, 46% of the survey participants expect their companies to operate between 75-100% capacity, a significant increase compared to the previous quarter. Capacity utilisation above 75% is a strong indicator for potential fresh investments, according to the Reserve Bank of India (RBI).
Moreover, more than 59% of the survey respondents anticipate a rise in private capital expenditure (capex) in the first half of FY25 compared to the second half of FY24. With the upcoming festive season, improvements in private investment, and robust employment prospects, the outlook for the second half of FY25 appears promising.
However, the survey results also paint a picture of cautious optimism. Businesses are confident about India's domestic growth trajectory but are aware of potential global headwinds. Geopolitical tensions, rising global commodity prices, and slowing external demand are top worries for businesses.
CII has cautioned that uncertainties in the global landscape remain and will need to be monitored closely. Despite these concerns, the CII Business Confidence Index suggests that India's economy is on a steady growth path, demonstrating a resilient business environment that continues to adapt and grow amidst opportunities and challenges.
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