Industrial outlook, consumer confidence show signs of improvement: RBI survey

The Business Expectation Index improved marginally for Q3 of 2013-14

Showing signs of some positive dynamics in economy, Reserve Bank of India‘s survey indicate a marginal recovery in business outlook.

The Industrial Outlook Survey conducted during November-December 2013, showed that activity may be on the mend.

The Business Expectation Index (BEI) improved marginally for Q3 of 2013-14, but still remained below the threshold level of 100 separating contraction from expansion. The index showed an improvement in Q4 of 2013-14 over the previous quarter.

Those polled in survey exhibited improvement in sentiments regarding production, order books, capacity utilisation, exports and imports for Q3 of 2013-14.

The demand outlook for Q4 of 2013-14 shows improved optimism as well perceptions on overall financial situation were also better for Q4 of 2013-14.

RBI said business confidence has turned around as indicated by a sharp quarter on quarter growth. The surveys by industry bodies (CII and FICCI) and research organizations indicate that better investment prospects, improving sales, new orders and improved. Export performance has contributed to rising optimism.

However, weak demand, political uncertainty and high inflation appear to be among the factors restraining growing optimism, RBI added.

The seasonally adjusted HSBC Markit Purchasing Managers’ Index (PMI) for services Continued to be in contraction mode in December 2013, while that for Manufacturing showed marginal expansion in activity.

Consumer confidence has also showed signs of improvement. Confidence Survey conducted in December 2013 showed improvement in confidence on the current Situation and future expectations.