Employee base is biggest cause of moderation in biz sentiment: Report

The sentiment among micro and small enterprises (MSEs) got subdued in the March quarter, the sixth CriSidEx survey has shown. The CriSidEx score for January-March 2019 (Q4FY19) was 122, improving only by a unit, from 121 in Q4FY18.

These findings are in consonance with a moderation in several high frequency indicators, including the index of industrial production and rural consumption, observed in the first half of calendar year 2019.

Negative sentiment grew in terms of employee base in both manufacturing and services sectors, the report said. Positive sentiment rose in terms of order books size and profit margins year on year, it added. 

However, this is likely to change, with 18 per cent respondents planning to add employees in the next quarter compared with 11 per cent in the previous one, said the report, released jointly by CRISIL and Small Industries Development Bank of India (Sidbi).

Services started from a lower base saw sentiment grow fast in FY19, and converged with manufacturing that saw ups and downs in positive sentiment in Q4, authors of the report told Business Standard. 

“MSEs operating in the leather, chemicals, pharma, IT/ITeS, and human resources segments reported a noticeable increase in positive sentiment, while those into gems & jewellery, textiles, auto components, and health care had a relatively subdued outing,” Mohammad Mustafa, chairman and managing director, Sidbi, said in a release.