Business Trends and Company Perspectives: Findings from the 128th CII Business Opinion Poll
Indian Economy Shows Resilience as CII-BCI Rises and Business Confidence Increases
The latest 128th Business Outlook Survey, conducted by the Confederation of Indian Industry (CII) in September 2024, has revealed a positive outlook for the Indian economy in the current fiscal year. The survey, which gathered responses from 200 firms across various sectors such as agriculture, mining, services, utilities, and manufacturing, paints a picture of optimism and resilience amidst global uncertainties.
The CII Business Confidence Index (CII-BCI) rose to 68.2 in the second quarter of the fiscal year, indicating a growing confidence among businesses. This index is a confidence indicator that measures firms' expectations of a rise in production, orders, demand, and stocks of finished goods. A rising CII-BCI is an indicator of good overall economic health and can lead to more investments and future growth.
One of the key drivers of this optimism is the increase in Gross Fixed Capital Formation (GFCF) in Q1 of FY24-25. This suggests that private investments are on the rise, although the survey does not provide specific details about the increase.
45% of the respondents believe that their bottom-line will improve in the quarter, while 49% of firms project an increase in employment. This positive employment outlook is further supported by 41% of the respondents who feel that their domestic investments would see an increase in the second quarter.
However, not all concerns have been alleviated. 17% of respondents are concerned about decreasing external demand, while 18% highlight rising global commodity prices as a top business concern. Among additional concerns, respondents mention fluctuating consumption patterns, food price volatility, and financial market instability.
24% of respondents cite protracted geopolitical tensions as a top business concern. This reflects the global uncertainties that the Indian economy is navigating. Despite these concerns, the survey highlights several growth drivers for the current fiscal year, including improved consumption patterns, favorable monsoon conditions, robust kharif crop sowing, moderate inflation, and strong corporate and banking balance sheets.
35% of the respondents feel that the cost of raw materials will remain unchanged, while 34% believe that the costs will increase. This suggests a mixed outlook for the cost of doing business in the coming quarters.
The 128th business outlook report for fiscal year 2024/25 by CII underscores the resilience of the Indian economy amid global uncertainties. As the country continues to navigate these challenges, the optimism and confidence shown by businesses are promising signs for the future of the Indian economy.
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