Dun & Bradstreet Business Optimism Survey finds an increase in Business Optimism for Q1 2021

Survey finds an increase in Business Optimism for Q1 2021

Highlight

• The Dun & Bradstreet Composite Business Optimism Index stands at 79.9 for Q1 2021. The index increased by 26.8% (y-o-y) in Q1 2021
• Optimism for net profits stands at 71% - an increase of 5 percentage points as compared to Q1 2020
• Optimism for new orders stands at 78% - an increase of 43 percentage points as compared to Q1 2020
• Optimism for volume of sales stands at 81% - an increase of 12 percentage points as compared to Q1 2020
• Optimism for net sales and net profits is the highest since Q1 2015
• Optimism for new orders is the highest since Q3 2014
• Optimism for selling price is the highest since Q1 2019

Mumbai, January 28, 2021: The Dun & Bradstreet Composite Business Optimism Index stands at 79.9 for Q1 2021, an increase of 26.8% as compared to the Q1 2020 survey. Five out of six optimism indices have registered an increase as compared to Q1 2020. The Dun & Bradstreet Composite Business Optimism Index, which has been measuring the changing business sentiment of India Inc. since 2002, is a leading indicator for India’s overall growth with a correlation co-efficient of 80% with the Gross Domestic Product (GDP).

“Dun & Bradstreet’s Business Optimism Index, which predicts economic activity three months ahead of the actual occurrence of GDP, has turned positive on a y-o-y basis for Q4 FY21 after negative growth throughout 2020. The survey data indicates a positive upturn in GDP growth during January to March 2021. The latest Index reflects the optimism generated from green shoots of economic recovery and the deployment of COVID-19 vaccines from January 2021.

“The surge in optimism is also likely to have been driven by rising consumer demand, higher businesses transactions and normalization of supply disruptions. These factors have led to an increase in demand for passenger vehicles, two-wheelers and retail sales, all-time high GST revenue collection in December 2020 and the highest e-way bills collection (a receipt required for inter and intra-state transport) in over two and a half years.

“Dun & Bradstreet's commerce disruption tracker also shows less disruption to business activity, with data for 4^th December 2020 indicating only 41% of businesses were still disrupted, compared to 90% in mid-July 2020.  Furthermore, there has been increased funding in start-ups, the government has announced big-ticket infrastructure projects and capital flows have surged, signaling the return of risk appetite of investors”.