Fuel prices, competition subdue biz confidence

New Delhi, July 16: The Indian business sentiment regarding future activity remained subdued in June amid intense competition, high fuel prices and strong cost pressures, says a survey.

As per the IHS Markit Business Outlook survey, just 20 per cent of Indian businesses expect growth in output over the next 12 months, unchanged from February.

The business confidence reading for India was below the average recorded for BRIC ( Brazil, Russia, India and China) nations at 23 per cent and globally at 31 per cent.

The threats to the 12month outlook are centred on uncertainty surrounding policy decisions, intense competition, high fuel prices and strong cost pressures, it noted.

“Latest survey data highlights that business confidence regarding future activity in India remains unchanged from February and is slightly weaker than the average for BRIC nations,” said Aashna Dodhia, economist at IHS Markit.

Ms. Dodhia further noted, “sentiment surrounding new business and revenue expectations is at the highest level seen since October 2016, as survey respondents forecast further improvements in client demand and market conditions”.

At the sector level, while Indian manufacturing firms signalled a stronger degree of positive sentiment, service providers were less upbeat.

Meanwhile, hiring intentions remained positive in June particularly in the manufacturing sector. Besides raising staff numbers, Indian companies intend to increase their investment spending to expand capacity.