Business confidence improves in July, says NCAER survey

Indicating improvement in short term business sentiments, business confidence index turned around and rose 5.5 per cent in July, according to National Council of Applied Economic Research (NCAER).

The finding is based on the Business Expectations Survey (BES) carried out by the think tank.

In a release, NCAER said Business Confidence Index (BCI) made a turnaround in July 2019, registering a rise of 5.5 per cent in July on a quarter-on-quarter basis after two consecutive dips in January and April 2019.

Further, the BCI rose 6.5 per cent on a year-on-year basis in the first quarter of 2019-20.

"The numbers suggest an improvement in short-term business sentiments... Business sentiment on three of the four components showed an upswing while 'the present capacity utilisation is close to or above optimal level' registered no change," the release said.

The four components that are given equal weightage are -- the overall economic conditions will be better in the next six months, the financial position of firms will improve in next six months, the present investment climate is positive and the present capacity utilisation is close to or above optimal.

"Firms were clearly more optimistic about future business prospects, specifically on better overall economic conditions and the healthier financial positions of firms, as reflected in the marked improvement of 5.5 and 4.7 percentage points, respectively, in these parameters.

"The percentage of positive responses to the present investment climate is positive' component rose from 44.2 per cent in April 2019 to 48.8 per cent in July 2019," the release said.

The survey tracks the business sentiments of around 600 Indian companies and elicits responses from firms/industries across six cities.