Industries in North India hopeful despite adverse economic scenario: Survey

Industries in North India hopeful despite adverse economic scenario: Survey
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First Published: Wed, May 14 2008. 05 04 PM IST
Updated: Wed, May 14 2008. 05 04 PM IST
New Delhi: Despite tightening money supply, increasing inflation and an appreciating rupee, companies from North India are optimistic about their business prospects over the next six months according to a survey conducted by the Delhi based industry chamber PHDCCI’s Business Perception Survey.
Around 20% of the respondents gave a rating of “1” to the level of their business confidence on a scale of 1-4. Around 42% rated their business confidence as being above average with a rating of 2. However, there were a substantial 20% who gave a rating of 3) and were apprehensive about the prevailing investment climate. A meager 7% expressed despondency (rating of 4) about the existing business environment.
The survey also reveals that over three fourth 75% of respondents were positive about their growth prospects and expects a rise of over 5% in their business activities. Around 20% of units expect their business to grow at a modest 0-5% and around 6% expect negative growth in commercial transactions in the next six months.
The survey also points out that most (over 90%) expect their sales to either rise or remain the same over the next six months. Similarly, half expect their profits to go up while around 35% anticipate the margins to remain the same in the current fiscal. Only around 15% feel that their profitability would decline during the year.
It is found that 45% of the respondents achieved capacity utilization of over 80% in their current business. Around 40% recorded capacity utilization of 61-80% and another 18% realised 41-60. Only around 5% have achieved capacity utilization of below 40%.
An overwhelming 65% of industry members located in North India were contemplating fresh capital investment and were working towards capacity expansion in the current fiscal. However, around 35% would still prefer to wait and watch before taking a decision to expand their business operations.
Among exporters, a significant 75% expect their order books to grow during the next six months. Many companies are contemplating fresh recruitment to keep pace with a proposed step-up in demand. In fact, around 43% are planning to increase their employee strength in response to growing demand even while 49% envisage no change in their employee base. Only around 8% are contemplating to reduce the size of their workforce in response to a fall in profits.
According to industry, among the four most important factors that come in the way of business development, infrastructure and power remain the most problematic. The survey shows that a majority (around 55%) of units rely on DG sets to the extent of 20% and beyond to cover their requirements of power. Around 33% of the units surveyed said that their dependence in DG sets is more than 40%.
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First Published: Wed, May 14 2008. 05 04 PM IST