The significant improvement suggests that businesses are expecting better financial performance, a crucial factor for long-term growth and sustainability in the marketplace…reports Asian Lite News
Dun & Bradstreet, a global leader in business decisioning data and analytics, has unveiled its Composite Business Optimism Index (BOI) for Q4 2024, which has risen to 94.8—an impressive 20.2% increase from Q3 2024. This surge marks the highest level of optimism for net sales in 15 quarters, indicating a positive shift in the sentiment of Indian businesses.
Since 2002, the Dun & Bradstreet Composite Business Optimism Index has been a key indicator of India’s economic growth, showing a strong correlation (around 80%) with the country’s Gross Domestic Product (GDP). The index has proven to be a reliable measure of changing business sentiment, reflecting the health of the Indian economy.
Key Highlights:
Sales volume optimism has reached its peak in 15 quarters. The index reveals that businesses are feeling more confident about their sales potential, a trend that bodes well for the overall economy as consumer spending increases.
Optimism for net profits is at its highest since Q1 2020. This significant improvement suggests that businesses are expecting better financial performance, a crucial factor for long-term growth and sustainability in the marketplace.
Selling price optimism is also at its best in a decade. This increase in confidence regarding pricing indicates that businesses anticipate higher revenues, which can positively impact their bottom lines.
There’s a renewed hope for employee hiring after four quarters of stagnation. The improvement in hiring sentiment signals that companies are planning to expand their workforces, reflecting confidence in the economic recovery.
Among various sectors, the accommodation and food services industries exhibited the most optimism across three of the six parameters measured. This sector’s upbeat outlook may be linked to the upcoming festive season, traditionally marked by increased consumer spending.
Arun Singh, Global Chief Economist at Dun & Bradstreet, stated, “The Business Optimism Index reflects strong consumer momentum as India approaches the festive season, typically marked by increased spending.” He emphasized that businesses are poised to leverage this festive demand in Q4 2024, anticipating a 7% rise in selling prices.
Singh noted that sales sentiment has rebounded to pre-pandemic levels, showcasing the resilience of businesses in adapting to changing market conditions. Despite ongoing concerns over rising costs and inflation, profitability remains robust, indicating a strong foundation for future growth.
However, challenges such as fluctuating energy prices, geopolitical uncertainties, high borrowing costs, and supply chain disruptions persist. These factors could potentially impact business operations and financial stability, underscoring the need for strategic planning.
Still, optimism for employment prospects is evident, with renewed hiring intentions signaling confidence in the economic recovery. This positive outlook for job creation suggests that businesses are preparing for growth and increased demand.
Key Findings from the Q4 2024 Survey:
Sales volume optimism increased by 14 percentage points, particularly in the accommodation and food services sectors. This growth reflects heightened confidence among businesses within these industries as they prepare for the festive season.
Net profits optimism rose by 11 percentage points, with wholesale and retail trade showing the most positivity. In contrast, the utilities sector remains the least optimistic, highlighting varying levels of confidence across different industries.
Selling price optimism grew by 7 percentage points, with accommodation and food services leading this parameter. Conversely, the information and communication sector lagged, indicating differing expectations within various sectors.
New orders optimism jumped 14 percentage points, again led by the accommodation and food services sector. This surge reflects businesses’ confidence in securing additional work and contracts as consumer demand rises.
Inventory levels saw a 3 percentage point improvement, with the mining sector showing the most optimism. In contrast, the metal manufacturing sector was the least optimistic, indicating sector-specific challenges.
Hiring optimism increased by 8 percentage points, with the automobile manufacturing sector being the most hopeful. This increase in hiring sentiment reflects a broader trend of businesses planning for growth and expansion.
The report is available for free download on the Dun & Bradstreet India website, providing valuable insights into business sentiment across the country.
The BOI is a quarterly survey-based index measuring the pulse of the Indian business community and has proven to be a reliable economic indicator. Respondents from various sectors across India provide insights on their expectations regarding company performance, allowing Dun & Bradstreet to compile and analyze these trends effectively.
Dun & Bradstreet has been a trusted partner for businesses since 1841, helping them enhance performance through data-driven insights. With a focus on supporting India’s “Atmanirbhar Bharat” vision and the “Make in India” initiative, the company aims to empower entrepreneurs by improving visibility and access to global markets.
Headquartered in Mumbai, Dun & Bradstreet Information Services India Private Limited provides data-driven products and technology platforms to assist clients in making informed decisions across various domains. Additionally, the company operates a Global Capabilities Center in Hyderabad, employing over 500 skilled professionals to deliver cutting-edge technology solutions.
For more information about Dun & Bradstreet, visit www.dnb.com.
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