High expectations in terms of sales and exports: improvement in trade mood

Mumbai, Ta. 21 September 2020, Monday

As the country's economic activity returns to normal, the trade industry expects higher sales and exports in the second quarter of the current financial year, indicating an improvement in their business mindset, according to the Confederation of Indian Industry's (CII) Business Confidence Index. BCI).

The BCI for the September quarter rose to 70.50. The index hit a historic low of 21 in the June quarter. The longest period of lockdown was in the June quarter.

The rise in the BCI is due to a significant increase in the expectations index. The figure was based on a survey conducted in August and September by industrial leaders from various sectors of the country. About 150 industries participated in the survey.

Fifty percent of those surveyed said they expected new orders and sales to increase in the September quarter. However, most of these saw a decline in new orders and sales in the June quarter.

Capacity utility is also on the rise as new orders grow. According to the survey report, 5 per cent of the survey participants expected capacity utilization to increase to 5 to 100 per cent and 31 per cent to 30 to 5 per cent.

The 5 per cent participants expected the country's GDP to decline by more than 3 per cent in the current financial year. A large number of participants said that the Reserve Bank would not change the repo rate in the current financial year, given the current high inflation rate due to disruption in supply transactions.