Business confidence improves in Q4 of FY 2022: NCAER survey

NCAER carried out the 120th round of its Business Expectations Survey (BES) in March 2022

AgenciesUpdated:Friday, April 22, 2022, 09:59 PM IST
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BCI also improved by 67.6 per cent in the fourth quarter of 2021–22 as compared to the corresponding period of 2020–21, said the National Council of Applied Economic Research (NCAER). / Representational image |

Business confidence index improved in the January-March period of this year and would remain buoyant in the coming months, a survey by economic think-tank NCAER said on Friday.

The Business Confidence Index (BCI) increased for the third consecutive quarter by 14.9 per cent on a quarter-on-quarter basis from 124.4 points in October-December period of 2021–22 to 142.9 points in the fourth quarter.

BCI also improved by 67.6 per cent in the fourth quarter of 2021–22 as compared to the corresponding period of 2020–21, said the National Council of Applied Economic Research (NCAER).

The upward movement in the BCI was driven by an improvement in sentiments for all the four components of the BCI -- 'overall economic conditions will improve in the next six months', 'financial position of firms will improve in the next six months', 'present investment climate is positive as compared with six months ago', and 'present capacity utilisation is close to or above the optimal level'.

NCAER carried out the 120th round of its Business Expectations Survey (BES) in March 2022, covering 500 firms in four regions across the country. The survey was supported by the National Stock Exchange of India Limited (NSE).

NCAER has been carrying out the BES on a quarterly basis since 1992.

''The latest round of the BES indicates that not only have firms overcome the pandemic-related slowdown but there is also an improvement in sentiments from the sluggishness observed before the pandemic,'' said Poonam Gupta, Director General, NCAER.

The BCI has achieved the highest level since the figure of 148.5 recorded in the third quarter of 2014–15, the think-tank said.

Except the consumer durables sector, which registered a rise of less than 1 per cent in sentiments, all other sectors showed an improvement in sentiments in fourth quarter of 2021–22 on sequential basis.

NCAER further said the business sentiments for the next six months were relatively more buoyant with regard to domestic parameters like production, domestic sales and ex-factory prices than external parameters like exports and imports of raw materials.

More than 70 per cent of the firms reported an increase in the unit costs of raw materials and electricity over the last three months, whereas 72 per cent of the firms perceived that the unit costs of raw materials would rise over the next six months, it added.

The sentiments of firms pertaining to the hiring of workers over the last three months were relatively stagnant in last quarter of 2021–22 as compared to the preceding three months, but future sentiments about hiring over the next six months exhibited resilience, it said.

The Political Confidence Index (PCI) increased by 39.2 per cent from 107.8 points in third quarter of 2021–22 to 150.1 points.

(With inputs from PTI)

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