New Delhi: Not much has changed on the ground at the industry level in the last six months, but the situation is going to improve within first half of 2015 reflecting optimism about sales volume and hiring of workforce by corporates as well, an ASSOCHAM Business Confidence Index has revealed.
As many as 54.2 per cent of the respondents in the Confidence measuring survey said not much has really changed at the operating level in the last six months, but more number of industry leaders expressed optimism about the shape of things to improve going forward.
Though 45.8 percent respondents to the ASSOCHAM Business Confidence Index believe that January -March 2015 quarter won’t see any change in their domestic investment plans, a considerable 41.7 per cent expected the job hiring prospects to be improving in the next quarter and in subsequent months.
Similar outlook is seen as regards international investment plans. “Typically investment follows improvement in sales and profitability. The latter things –sales and profitability are falling in place and there would be a visible change in the next few months following which investment should follow since there is always a lag,” ASSOCHAM Secretary General D S Rawat said.
As many 58.3 percent of the respondents expect that during January to March 2015 their sales volume will increase and 45.8 per cent of them expressed similar outlook for profits. With regards to the expected order books position in the Jan-Mar 2015 quarter majority (58.3 percent) of the firms seem to be optimist and expect an increase in the orders.
Thus, there are some indications of a possibility of a revival being seen in the demand within the economy. In terms of the wage costs scenario, the industry opines that in the October –December 2014 quarter (50.0 percent of the industry feels in that manner) there has been no change in terms of the expenditure incurred on wages.
However, going forward there seems to be some concerns as it is expected that the wage costs will be increasing in the January-March quarter, with almost half the respondents resonating this view.
Export growth remained positive although the deceleration since July requires vigilance. Conditions in overseas market are bound to affect the Indian industries dependent upon them both for as market sources and s input providers.
Industry believes that exports market will remain sluggish as majority (29.2 percent) of respondents expects that there will no change in the exports volume. Similarly, majority (41.7 percent) of respondents expect that there will no changes in the import. Higher input costs shrinks the profit margins of the firms.
Upon asking the survey respondents the question of whether their raw material prices have increased or not in the October-December 2014, 37.5 percent which formulate the majority of the respondents feel that there has been no change in the raw material prices. Going forward the majority of the industry further seems to be of the view that the raw material prices in the January-March 2015 quarter won’t increase further.