Confidence Up, Expectations Down

Updated: May 31 2004, 05:30am hrs
The Confederation of Indian Industrys (CII) 61st Business Confidence Survey has recorded a 0.7 per cent fall in expectation index at 66.5 during April-September 2004 over the last survey (October03-March04).

While the expectations on the overall performance of the economy have not changed, they have declined as far as the growth prospects of both the activity sector and individual companies are concerned. The expectation index for own activity sector at 63.4 has dropped by 1.9 points and the index for own company at 67.9 has dropped by only 0.2 points, CII said in a statement.

It said that the survey was conducted before the elections and therefore did not reflect the post-poll sentiments.

The survey covered responses from 101 companies and is based on the actual performance of industry during October03-March04 and the forecast for April-September 2004.

According to the survey, the business confidence index (BCI) for April-September04 stands at 66.05 points. This is an improvement of 1.15 points over the previous period (October03-March04) and is the third consecutive rise in the index, CII said.

The index is constructed as a weighted average of the current situation index (CSI) and the expectations index.

The CSI stands at 65.2 and has shown a gain of 5 points over the previous period. This exhibits that industry perceives the present conditions to be better off than what they were six months back, CII said.

The survey has also revealed respondents opinion that the improvement in the overall economy has been higher than their own activity sectors and their own companies. The CSI for the overall economy has jumped by 8.2 points, whereas the index for the activity sector and own company exhibited an increase by 3 points and 5.3 points, respectively, it said.