India is at a near 8-year high in business optimism for the fourth quarter of this calendar year since the second quarter of the calendar year 2014, said a study.
The Dun and Bradstreet Composite Business Optimism Index (BOI) for India for Q4 2021 stands at 94.6, up 27.4% compared to the Q3 2021 survey, reports The Economic Times.
According to the study, India's construction sector is most optimistic on the level of the selling price, inventory levels, and hiring of employees.
Data showed five out of six optimism indices have registered an increase as compared to Q3. Arun Singh, Global Chief Economist at Dun and Bradstreet said India's GDP growth during the October-December quarter of 2021 is likely to be strong as the BOI has surged to an almost eight-year high.
Around 79% of the respondents in the study expected the volume of sales to increase in Q4 2021, compared to 67% the quarter before. 62% of the respondents expect an increase in net profits in Q4 2021, compared to 48% in the quarter before.
"The consumption boost to India Inc., from easing lockdown restrictions, pent-up and festive demand, arrears payment of dearness allowances along with improving consumer confidence levels, are quite evident from the optimism for new orders which has climbed to the highest level since Q3 2014," Singh said.
49% of the survey's respondents expect an increase in the size of their workforce employed during Q4 2021 while 45% anticipate no change. 6% of the respondents expect their workforce size to decline.
Singh said that the sustenance of the optimism level of businesses depends on how inflationary pressures and the supply situation is managed.
"Sustenance of the optimism level of businesses, however, depends on how effectively domestic supply challenges are managed and inflationary pressures are controlled. As prices, in general, are expected to go up driven by supply disruptions and rising commodity prices, both consumer spending and corporate earnings are at risk," he added.