BCI moderates by 5.3 points on global uncertainities for H1FY09

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New Delhi, May 25 (UNI) The Business Confidence Index (BCI) for the first half of the current fiscal has moderated by 5.3 points on concerns of global economic uncertainities, high interest rates and cost of labour, a CII survey said today.

It, however, said the outlook for GDP growth is expected at eight per cent plus and investments are expected to be on track.

The BCI was higher among the manufacturing firms (61.4) as compared to non-manufacturing firms (60.5) engaged in provision of services, said the CII's 69th Business Outlook Survey.

The Current Situation Index (CSI) that compares current business conditions has lost 3.1 points for the period April-September 2008-09 when compared with the previous six months and about 2.9 points compared to the corresponding period of last year, reflecting the sentiments related to decline in growth of industrial production, CII said.

The Expectations Index (EI), that reflects the perceptions of domestic industry with regards to performance of their company, sector and the economy for the period April-September 2008-09, lost 6.4 points over the first half of the current financial year reflecting lower expectations in terms of performance during the first half of 2008-09.

However, the EI for first half when compared to the corresponding period last year is actually down by 2.9 points.

Meanwhile, it revealed that 67 per cent of the respondents plan to increase investments during April-September 2008-09.

The value of production is also expected to increase in the next six months, felt by 73 per cent of the respondents. This will help increase employment in the second half of this financial year.

Employment had increased during the period October-March 2007-08 as revealed by 51 per cent of the respondents.

While, 63 per cent of the respondents expressed confidence in exports expansion for the period April-September 2008-09.

The survey also revealed that 62 per cent of the respondents expect global economic uncertainty to impact their company's earnings.

In order to minimise the negative impact, 33 per cent of the respondents think that interest rate should be reduced to boost investment and consumer demand while 28 per cent of the respondents felt that diversification of export market would help counter possible impact of US economic slowdown on their exports.


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