MSME Business Confidence: The latest ASSOCHAM – Dun & Bradstreet Small Business Confidence Index (SBCI) survey for Q3, 2023 on Friday noted that the persistent high input costs are expected to endure among businesses, primarily due to the limited bargaining power of SMEs, potential supply chain bottlenecks and uncertainty in the movement of commodity prices globally.
As a result, 80 per cent of SMEs anticipate rising costs to translate into increased selling prices in Q3. According to the survey, higher sales prices and a robust demand outlook are likely to favour higher profitability during the quarter. This was also reflected in the SBCI, which measures business optimism among SMEs, jumping to 105 in Q3, up by 23 per cent from Q2 2023.
The survey indicated quarter-on-quarter growth in optimism in most of the key parameters including sales, employment, prices, inventory, and investment except for raw material prices. 6 out of 7 businesses were optimistic about higher domestic order inflow demand during the quarter, while they are hopeful about improvement in their own business prospects despite weakness in the external economy.
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“Now that the SMEs find themselves on a fast lane, the Indian economy would get further momentum to stay as the fastest growing economy amongst the leading economies of the world,” said Deepak Sood, Secretary General, Assocham.
Moreover, despite tight inflationary measures by the Reserve Bank of India (RBI), about 69 per cent of respondents were hopeful of normal credit availability in Q3. Businesses also opined that they are set to expand with new hiring and investments in fixed capital.
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“Notwithstanding subdued growth of the global economy, the Indian economy is thriving on robust credit expansion and an optimistic domestic demand outlook that is reflected across parameters. Despite a challenging global environment, Indian SMEs appear to be extending their competitive advantage by improving their export outlook. Three in four respondents have indicated planned capital expenditure and hiring expansion.” said Dr Arun Singh, Global Chief Economist, Dun & Bradstreet.