D&B business optimism meter sees a plunge

The D&B Composite Business Optimism Index for the April-June quarter has recorded a sharp 18.2 per cent year-on-year decline.

This is against a decline of 8.8 per cent in corresponding year-ago period.

The global business information provider, in a statement, said while the decline could partly be attributed to the high base effect, it also points to the underlying cautiousness prevalent in India Inc amid uncertain global and domestic economic outlook.

“The recent rend in the D&B Business Optimism Index shows continued weakening of business sentiment. The Index has declined by 18.2 per cent (y-o-y) in Q2-2012, the steepest decline in the last 12 quarters,” said Mr Kaushal Sampat, President & CEO – India, Dun & Brastreet.

However, on a quarter-on-quarter basis, the fall in the Index is only 4 per cent. This needs to be viewed against the backdrop of possible rate cuts by the RBI towards the end of Q2 2012, which could boost business confidence, he said.

The Composite Business Optimism Index, comprising six components – net profits, new orders, sales volume, selling prices, employees and inventory levels -- for the April-June quarter stood at 150, against 183.5 in the corresponding year ago period.

The basic goods sector is highly optimistic of future growth, possibly owing to increased thrust on infrastructure development in the Union Budget, said a D&B statement.

The slowing pace of investment activity has taken a toll on the capital goods sector, wherein the optimism was muted.