Dun & Bradstreet Business Optimism increased in Q3 2018

Business Optimism increased in Q3 2018

Business Optimism Index increases by 3.6% (y-o-y)

Highlights

·         Dun & Bradstreet Composite Business Optimism Index stands at 79.5 during Q4 2018, an increase of 3.6% as compared to Q4 2017.

·         Optimism for net profits stands at 65% - an increase of 9 percentage points as compared to Q4 2017

·         Optimism for new orders stands at 70% - an increase of 5 percentage points as compared to Q4 2017

·         Optimism for volume of sales stands at 75% - an increase of 4 percentage points as compared to Q4 2017

Mumbai, October xx, 2018: The Dun & Bradstreet Composite Business Optimism Index stands at 79.5 during Q4 2018, an increase of 3.6% as compared to Q4 2017. Five of the six optimism indices have registered an increase as compared to Q4 2017, while three optimism indices have declined when compared to Q3 2018.

D&B's Composite Business Optimism Index:  Q2 2001 – Q3 2018

“The Dun & Bradstreet Business Optimism Index for Q4 2018 stands marginally improved due to a mix of several factors. Aspects that appear to improve optimism levels are expectations of higher demand given festive season, implementation of the 7^th Pay Commission Awards, reduction in GST rates on selected commodities and increase in MSP of Khariff crops. On the other hand, business optimism appears to have been tempered by the ‘prevailing risks’ from the high NPA levels in the banks, the tightening of liquidity, depreciation in rupee and firming of crude oil prices and the ‘emerging risks’ from geo-political issues and trade wars. Going forward, the Index will depend upon the unfolding of further information or regulations on NBFCs following the recent default by a systemically important NBFC which is likely to add to the cautiousness amongst businesses, especially MSMEs, as they are largely funded by this segment” said Manish Sinha, Managing Director – India, Dun & Bradstreet.

Around 75% of the respondents expect volume of sales to increase in Q4 2018 compared to 71% in Q4 2017, an increase of 4 percentage points. While around 19% expect it to remain unchanged, around 6% expect the volume of sales to decline.

Around 65% of the respondents expect an increase in net profits in Q4 2018, compared to 56% in Q4 2017, an increase of 9 percentage points. Around 26% expect net profits to remain unchanged, while around 9% expect it to decrease.

65% of the respondents expect no change in the selling price of their products for Q4 2018. 28% of the respondents expect the selling price of their products to increase during Q4 2018, while 7% expect a decline.

Around 70% of the respondents expect their order book position to improve in Q4 2018, compared to 65% in Q4 2017. While around 24% of the respondents expect new orders to remain unchanged, around 6% anticipate new orders to decrease.

33% of the respondents expect an increase in the size of their workforce employed during Q4 2018, as compared to 29% in Q4 2017. While 60% anticipate no change in the number of employees, the remaining 7% expect their workforce size to decline.

Around 32% of the respondents expect their inventory level to increase during Q4 2018, as compared to 28% in Q4 2017. While 62% anticipate no change in inventory level, 6% expect inventory level to decline.