Dun & Bradstreet Business Optimism Index at a 14-Quarter High in 2018 Across India

Dun & Bradstreet, which grows the most valuable relationships in business by uncovering truth and meaning from data, today announced that its Composite Business Optimism Index stands at 91.0 during Q1 2018, an increase of 18.6% as compared to Q4 2017. All key (six) optimism indices have registered an increase as compared to Q4 2017 as well as Q1 2017.

“Business Optimism has surged during the quarter ended March 2018 and is at its highest across the past 14 quarters,” said Manish Sinha, Managing Director – India, Dun & Bradstreet. He continued, “The upcoming Union Budget and assembly elections during 2018 might have generated optimism about government sops that could push revival in consumption. Besides, demand condition is likely to improve given the waning of the impact of demonetisation and stability returning after GST implementation. Optimism levels are building up on net profits, selling prices and hiring of employees which indicates healthy sign for revival.”

He further added that as the global economy is expected to pick up steam during the year, India should stand to gain. “Favourable interest rate differential and continued reforms for improving ease of doing business provide favourable ground for domestic and foreign investors. For business confidence to get a sharp boost from here on, government measures on reviving investments and demand should result in further acceleration. The upcoming Union Budget should be pragmatic and growth oriented rather than fiscally stringent,” he said.

The D&B Business Optimism Index is widely recognized as an indicator, which measures the pulse of the business community and serves as a reliable benchmark for investors. The index is arrived at on the basis of a quarterly survey of business expectations.

The key survey findings are: 78% of the respondents expect volume of sales to increase in Q1 2018  compared to 59% in Q1 2017, an increase of 19 percentage points. While around 16% expect it to remain unchanged, 6%  expect the volume of sales to decline.

67% of the respondents expect an increase in net profits in Q1 2018, compared to 52% in Q1 2017, an increase of 15 percentage points. Around 26% expect net profits to remain unchanged, while 7% expect it to decrease.

Around 49% of the respondents expect no change in the selling price of their products for Q1 2018. 46% of the respondents expect the selling price of their products to increase during Q1 2018, while 5% expect a decline.

74% of the respondents expect their order book position to improve in Q1 2018, compared to around 60% in Q1 2017. While around 22% of the respondents expect new orders to remain unchanged, 4% anticipate new orders to decrease.

38% of the respondents expect an increase in the size of their workforce employed during Q1 2018, as compared to 27% in Q1 2017. While around 54% anticipate no change in the number of employees, the remaining 8% expect their workforce size to decline.

Around 29% of the respondents expect their inventory level to increase during Q1 2018, as compared to 28% in Q1 2017. While around 54% anticipate no change in inventory level, 17% expect inventory level to decline.