Small and Medium-sized Enterprises (SMEs) in the country are “highly optimistic” about domestic economic growth in the next 12 months and are confident about their business performance in 2017, according to a study. The inaugural American Express Global SME Pulse2 2017 was carried out among senior executives and decision-makers across 15 countries, with the purpose of understanding the priorities and aspirations of the SME community.
It revealed that Indian SMEs are overwhelmingly optimistic about the health of the world economy. Companies surveyed form part of India’s mid-market organisations having revenues of up to USD 90 million, including SMEs.
“With a conducive policy framework and positive regulatory steps taken by the government, the SME sector has seen substantial growth.
“This survey clearly highlights the optimism and confidence among SMEs; and businesses are deftly navigating through challenges to thrive in India,” Saru Kaushal, Vice President and General Manager, Global Corporate Payments, American Express India said.
According to the survey, Indian SMEs are more positive about the domestic economy over the next twelve months than their Asian counterparts. India led with 71 per cent followed by Japan at 62 per cent, China at 54 per cent, and Singapore at 26 per cent.
Interestingly, the confidence of Asian countries is substantially higher than the global average of 45 per cent, the report noted. In terms of global economic outlook, SMEs in India have higher optimism at 65 per cent than Asian counterparts with Japan at 58 per cent, China at 47 per cent and Singapore at 20 per cent.
SMEs in India are confident about their ability to deliver increased revenues and profitability.
According to the survey, 76 per cent of the Indian SMEs surveyed expect revenue growth of at least 4 per cent in 2017. In terms of profitability, Indian SMEs are similarly upbeat with 45 per cent forecasting a profit of 8 per cent per annum by 2020. This is in excess of the global findings which show 27 per cent of SMEs forecasting net profits of 8 per cent over the same period.
While SMEs in India are optimistic about the economy and their own business, they cite domestic policies, uncertain laws and regulations as major concerns over the next year.
SMEs in India see positive light among the government’s recent initiatives and support to boost the sector.
The survey said 38 per cent of Indian SMEs feel that expansion into new domestic market segments will be a top priority for their business over the next three years. They are also pushing for sales growth with over 35 per cent looking to grow their current market share.