Subdued auto sales, slower tendering before elections, regulations impact micro, small businesses’ sentiment

By: |
Published: June 1, 2019 7:40:15 PM

Among categories wherein MSEs reported a noticeable increase in positive sentiment on a year-on-year basis included leather & leather goods, chemicals, pharmaceuticals, IT/ITeS, and human resources.

42 per cent of the manufacturing MSEs reported a good January-March quarter.

The business sentiment among micro and small enterprises (MSEs) moderated a bit as the CRISIL-SIDBI MSE Sentiment Index (CriSidEx) for January-March 2019 quarter scored 122 against 128 in October-December 2018 though marginally up from 121 a year back.

The sentiment in the last quarter was triggered by factors including “slowdown in auto sales leading to inventory pile-up and production cuts by the automobile industry; slower tendering/awarding ahead of elections affecting the engineering goods sector; and, regulations impacting logistics,” said, Amish Mehta, Chief Operating Officer, Crisil.

Even while both manufacturing and services sectors, at a parameter level, reported a slight increase in the share of positive respondents on order-book size, there was a decline in the share of positive respondents in employee base vis-a-vis the previous quarter, SIDBI said in a statement citing the survey.

42 per cent of the manufacturing MSEs reported a good quarter – at par with the preceding quarter. In the services sector, the number of MSEs that reported a good quarter stood at 39 per cent, down from 41 per cent in the previous quarter but up from 29 per cent in the same period a year ago.

Among categories wherein MSEs reported a noticeable increase in positive sentiment on a year-on-year basis included leather & leather goods, chemicals, pharmaceuticals, IT/ITeS, and human resources. while those in gems & jewellery, textiles, auto components and health care saw a relatively subdued sentiment, said Mohammad Mustafa, IAS, Chairman and Managing Director, SIDBI.

While the sentiment is expected to remain positive in the April-June 2019 quarter, however the share of respondents expecting a good next quarter is the lowest in all six CriSidEx surveys so far.

Moreover, 47 per cent large MSEs said they had a better survey quarter with over 25 employees compared with 30 per cent having below 10 employees.

With respect to MSEs focusing on exports, 45% reported an increase in order book compared with 43 per cent of domestic MSEs — signalling a better quarter for the former. Importantly, export MSEs have been faring better than domestic market focused MSEs in the past two quarters.

The share of respondents among importers that had higher procurement in the past quarter went down to 17 per cent from 25 per cent in the preceding quarter.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1Byju’s double paid user base triples revenue to Rs 1,430 crore in FY19; eyes Rs 3,000 crore next fiscal year
2Amazon focuses on small cities to win grocery battle; expands service to 110 cities
3Beer startup Bira 91 raises pre-Series C funding from Sixth Sense Ventures; valuation hits $246 million