The Hindu Business Line : D&B optimism index down 11% in Q3

Mumbai, July 10 The Dun & Bradstreet Composite Business Optimism Index for the third quarter of 2008 recorded a decrease of 11.2 per cent to 135.6 from 153.7 in the previous quarter. On a year-on-year basis, the Business Optimism Index recorded a decrease of 18.4 per cent.

Based on the responses received, it was seen that all the six optimism indices — volumes of sales, net profits, selling prices, new orders, inventory levels and employee levels — have declined as compared with the previous quarter, a press release from D&B said.

The release also said that although optimism amongst respondents from all sectors surveyed was lower as compared with previous quarters, optimism was particularly low among respondents in the consumer durables sector and the basic goods sector.

“The increase in domestic fuel prices and high inflation expectations led the RBI to tighten its monetary policy. The hardening interest rates and the continued high inflation expectations have adversely affected corporate sentiment, as is evident from the 11 per cent decline in the Business Optimism Index. This is the sixth consecutive quarter that we have seen the Optimism Index for Net Profits moderate,” said Mr Kaushal Sampat, Chief Operating Officer, Dun & Bradstreet (India).

Demand expectations

Demand conditions are expected to be subdued during the July-September 2008 quarter. While approximately 71 per cent of the respondents expect sales volume to increase during the third quarter of 2008, as much as 13 per cent expect a decline in sales volumes.

Profit expectations moderated for the sixth consecutive quarter. While about 58 per cent of the respondents expect an increase in profits during the third quarter this year, another 15 per cent expect a decline in net profits and as much as 27 per cent anticipate no change in net profits during the period.

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