Business sentiment recovers in July-Sept: CII Survey
25 September 2020: As the government has gradually unlocked the economy and business activity has resumed, the recent CII Business Outlook Survey, post COVID-19, shows that business sentiment has bounced back. The latest CII Business Confidence Index has surged to the level of 50.3 in July-September 2020, bouncing back from its lowest reading of 41.0 recorded in Apr-Jun 2020. The survey was conducted during August-September 2020 and saw the participation of more than 150 firms across all industry sectors, including micro, small, medium and large enterprises, from different regions.
The results for the July-September quarter signal green shoots of recovery as nearly half of the respondents anticipate an increase in new orders (49 percent) and sales (46 percent) during the said quarter, even though a majority of them witnessed decline in sales and new orders in the preceding quarter.
As businesses still struggle to recover from the pandemic, more than half of the respondents (51 percent) have indicated that the weakness in domestic demand is likely to be the topmost risk to business confidence in the next six months. The heightened uncertainty led by the recurrent lockdown in certain states is impacting business operations and lengthening the recovery timeline even though a majority of the workforce has already returned to the place of work for a major share of the respondents (42 percent).
Commenting on the survey results, Chandrajit Banerjee, Director General, CII said “While a recovery is underway, it could be tremendously expedited through continued government support and handholding of businesses during this crisis”.
He said that profitability may be slightly harder to achieve during this pandemic as nearly half of the respondents continue to expect a decline in profits in the July-September quarter after a majority of them (76 percent) experienced this in the preceding quarter.
With the Unlock 4.0 guidelines, the Government has allowed restart of almost all sectors to operate. However, there are still many ad hoc restrictions being imposed by the States which have been an impediment to the unlock process.