What is worse is that 52% of the 524 CII members surveyed, which covered a cross section of various industrial sectors, foresee lower profits during the second half ending March 1999 while 34% expect the current trends to continue. Barely, 14% expect profit margins to improve.

The survey revealed that barely 16% of the companies surveyed are optimistic about the general business prospects in the second half while as many as 47% of the respondents are pessimistic (compared to merely 19% in the last survey) and 37% expect the present trend to continue.The ranks of pessimists in the industry has swelled from 19% in the previous to 47% while the optimists have plummeted from 38% to 16%.

Poor demand was reflected in the high inventory levels.Nearly 37% of the respondents reported high inventory levels during the six months ended September 1998 while 36% reported the same levels of inventory and 27% saw lower levels. Thirty nine% of the companies surveyed expect the inventory levels to remain stagnant while 34% have forecast a decline while 27% expect higher inventory levels.On the sales front, 35% of the respondents foresee lower sales during the second half, 26% foresee higher sales and 39% expect the present trend to continue. Lack of demand is also reflected in the survey with only 15% of the respondents reporting an increase in demand for their products.

In the first half, as many as 45% of the companies surveyed reported lower sales, 40% stagnant and merely 15% said sales were higher. The corporate sector predicts an end to the three-year reign of stability on the prices front. Only 59% of the respondents expect the inflation rate to be within five to 10% as against 86% in the previous two surveys. Over 40% expect the inflation rate tocross 10%.

The scenario on the production front is also disappointing. Thirty eight% of the respondents forecast a production growth of upto 5% while 21% foresee a growth of between 5 to 10%. Merely 17% said that the production growth would be higher than 10% and 24% of the respondents forecast a negative growth.

Of the 461 respondents from the manufacturing sector, only 28% achieved a capacity utilisation of over 80% while 35% said the utilisation was between 61 to 80%. Nearly 30% of the respondents said that capacity utilisation was between 41 to 60%. Major infrastructure bottlenecks identified in the survey are power (26%), roads (25%), ports (21%), railways (13%) and telecom (8%).