Fuelled by global economic slowdown led by the US-China trade war as well as a plethora of domestic issues plaguing the country such as an unevenly distributed monsoon, continued farmer protests, loan waivers, subdued new investments, and fears of fiscal slippage, the business optimism index fell to 7.2 percent in the Q1 2019, according to Dun & Bradstreet, a data analytics firm.

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According to the report, the business optimism index was at 73.8 during the first quarter of 2019, adding that five out of six optimism indices have fallen in Q1 2019 as compared to Q4 2018.

“The ruling party in centre lost three states in the state elections, possibly leading to questions amongst businesses: whether we would have a new government in centre, whether we would have a continued reform agenda and whether the various ambitious projects would stay...Going ahead, the announcements in the union budget 2019-20 and trepidations over the outcome of the general elections is likely to weigh upon the sentiment of India Inc," Manish Sinha, managing director – India, Dun & Bradstreet said.

Here are the key highlights from the report:

71 percent of the respondents expect volume of sales to increase in Q1 2019 compared to 75 percent in Q4 2018, a decrease of 4 percentage points. While 18 percent expect it to remain unchanged and 11 percent expect the volume of sales to decline.

63 percent of the respondents expect an increase in net profits in Q1 2019, compared to 65 percent in Q4 2018, a decrease of 2 percentage points. 28 percent expect net profits to remain unchanged, while 10 percent expect it to decrease.

76 percent of the respondents expect no change in the selling price of their products for Q1 2019. 19 percent of the respondents expect the selling price of their products to increase during Q1 2019, while 5 percent expect a decline.

63 percent of the respondents expect their order book position to improve in Q1 2019, compared to 70 percent in Q4 2018. While 29 percent of the respondents expect new orders to remain unchanged, 8 percent anticipate new orders to decrease.

40 percent of the respondents expect an increase in the size of their workforce employed during Q1 2019, as compared to 33 percent in Q4 2018. While 56 percent anticipate no change in the number of employees, the remaining 4 percent expect their workforce size to decline.

22 percent of the respondents expect their inventory level to increase during Q1 2019, as compared to 32 percent in Q4 2018. While 64 percent anticipate no change in inventory level, 14 percent expect inventory level to decline.

One basis point is a hundredth of a percentage point.

First Published:Jan 14, 2019 12:23 PM IST