Fifty per cent of the participants felt that overall economic conditions have deteriorated over the last six months compared to 19 per cent in the last survey. While 38 per cent believe that the current economic situation will be maintained over the next six months, nearly one third feel that things would turn worse and the situation would further weaken. The silver lining in the survey is the fact that nearly 54 per cent of the participating firms have reported that their investments are likely to increase in the coming six months.
This figure is much higher when compared to the figure of 33 per cent obtained in the previous survey.
The improvement in the investments index is largely due to the higher reported investments by the heavy industry members.
The moderation in the assessment made by the participating companies about performance particularly at the economy and at the industry level is reflected in the movement of the confidence indices computed by FICCI.
The values of the three indices computed by FICCI, which had declined to a five-year low in the last survey, have further moved down in the present survey.
The Current Conditions Index has dipped to 54.5 in the current survey from 59.3 in the last survey.
The Expectations Index has moved down to 55.7 in the current round from 62.2 in the last round.
The present round of FICCI Business Confidence Survey for the third quarter of FY08 was conducted in March this year.
The survey drew responses from 392 companies having turnover ranging from Rs one crore to Rs 50,000 crore.
The respondents were largely from sectors such as cement, pharmaceuticals, textiles and apparel, leather, FMCG, heavy equipment and machinery, financial services, paper, metal and metal products, chemicals, IT, auto and auto ancillary and steel.