Mumbai, Jan 19: International rating agency Dun & Bradstreet's India Business Optimism Index for January-March 2001 has continued to decline, with all six parameters including net sales, net profits, selling prices, new orders, inventory levels and employees, recording steep drops.In fact, three of the optimism indices, including net profits, selling prices and inventory levels touched all-time lows in the first quarter (Q1) of 2001 and remaining three including net sales, new orders and employees were at their second-lowest levels.
The index is arrived at on the basis of a quarterly survey of business expectations from a sample of companies that are selected randomly from D&B's commercial credit file.
The negative sentiment is deeper in manufacturing sector whereas the service sector continues to remain largely upbeat, said Mr Rajesh Mirchandani, vice-president & managing director, D&B, Asean/South Asia.
The steep drop in business optimism in Q1 2001 strongly reinforces the negative outlook witnessed in the fourth quarter (Q4) 2000.
The decline seems to have been fuelled by several factors such as the actual impact of the oil prices hike on the bottom line of Indian business, hype regarding cheap imports from China and the threat of political instability arising out of disruption of parliamentray proceedings in December, he said.
However, the survey says that the decline of business optimism in India is along the lines of the negative trend witnessed globally. In D&B'S Q4 2000 International Business Expectation Survey, all World Indexes (net sales, net profits, selling prices, inventories and employee levels) were at lower levels as compared to the previous quarter. The Asian region reported the sharpest drop in Q4 2000 with all five Asian indices retreating.
The sample of companies that are selected is a microcosmic representation of the country's business community and include companies from several sectors including manufacturing, wholesaling, retailing construction, service sectors.
The respondents to the survey were asked six standard questions regarding whether specified parameters including net sales, net profits, selling prices, new orders, inventories, employee levels will register an increase, decline or show no change in the ensuing quarter as compared to the corresponding quarter of the previous year.
The indices are then calculated by subtracting the percentage of respondents expecting decreases from those expecting increases.
Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
