CII Business Confidence Index for Oct-Dec 2010 falls by 1.4 points

The Confederation of Indian Industries( CII) has just completed it’s  74th Business Outlook Survey.The new survey reveals that the Business Confidence Index (CII-BCI) for October-December 2010 has fallen by 1.4 points to 66.2 as compared to an increase of 1.5 points during the April-September 2010 time period.

The survey has revealed that the current top four concerns of respondents were Inflationary Conditions, Slackening Consumer Demand,Cost and Availability of Labour and High Interest Rates.

The survey was conducted during a one-month period between August and September 2010 to guage industry’s perception about its prospects for the quarter ending December 2010. CII henceforth plans to conduct the survey on a quarterly basis.CII Business Confidence

The CII survey, revealed that a majority of respondents (59%) expect GDP growth rate above 8.0%, of which 39% expect the growth rate to be in the range of 8.0 to 8.5% in 2010-11. On inflation, 70% of the respondents expect average inflation for 2010-11 to be above 6.0%, of which 38% expect it to be higher than 8.0%.

The prospects for investment, capacity utilization, production, employment and exports as elements that build up the business confidence were also looked into by the survey. The survey revealed that 63% of the respondents expect an increase in their spending on capacity expansion during October-December 2010 as compared to the previous quarter. Further, 72% of respondents expect capacity utilization to exceed 75% in the quarter ending December 2010 compared to 55% of respondents whose capacity utilisation actually exceeded 75% in the previous quarter.

The survey also reveals that about 80% of the respondents do no expect the availability of credit to increase, while 94% feel that the cost of credit will not fall in October –December 2010.

77% of the respondents expect their sales to rise while 67% of the respondents foresee an increase in production in October-December 2010 compared to the previous quarter. Also, majority of the respondents (59%) expect raw material prices to go up in the coming quarter.

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