The services sector is expected to grow at more than 9.5% during the current fiscal, according to a CII services sector snap poll. The majority of the CEOs did not expect the services growth to decline during the current year. The major impediments to services growth as revealed by the CEOs were global economic slowdown, deceleration in the economy and shortage of talent and skills.
Chandrajit Banerjee, director general, CII said, ?The CII snap poll reveals robust services growth expectation during the current year and supports GDP growth expectation of 8% plus. Both investment and employment is expected to increase in the services sector despite pressure on profitability during the current year?.
The investment outlook for the current year has been reported to be positive by the CII snap poll. The CEOs polled revealed that 97% of them would continue with their expansion plans in their own companies and also expected 90% of the firms in their area of business to continue to expand during the current year. Revealing the investment expansion for the entire services sector, 87% of the CEOs felt that expansion would continue during the current year.
Majority of the participating CEOs expected employment during the current year to increase. The CII snap poll enumerated sector wise status of employment outlook for the current year. Around 64% of the CEOs expected employment to increase in financial services, 66% of the CEOs expected employment to increase in IT, and telecom and 94% of the CEOs expected employment to increase in health care sector.
While the growth and investment outlook, as revealed by the snap poll, is healthy, the margins are expected to be under pressure. Of the CEOs polled, 86% of them revealed that profits would be under pressure. This is mainly due to the high interest rates and stiff domestic competition and increase in staff costs.