24 October 2013
MNI INDIA BUSINESS SENTIMENT
EMBARGOED UNTIL 9.45 A.M. NEW DELHI TIME, 24 OCTOBER 2013
MNI India Business Indicator Broadly Stable at 59.8 in
Production takes a hit
The MNI India Business Indicator remained broadly stable in October at 59.8
compared with 59.4 in September, although expectations for the next three months
fell, a possible seasonal effect due to the festival season approaching an end.
Apart from overall business sentiment, all other current conditions indicators fell
between September and October. Fourteen out of the 15 indicators measuring
expectations for the next three months also declined.
Both Production and New Orders suffered significant declines in October having risen
strongly in the previous month. Manufacturing firms showed a sharp decline in both
Companies reported that the depreciation in the rupee was hurting business even
more than last month, with the indicator measuring the impact of the exchange rate
hitting the lowest level since the series began in November 2012.
Inflationary pressures eased in October with both Input Prices and Prices Received
posting significant declines.
Commenting on the latest survey, MNI Indicators Chief Economist Philip Uglow said,
“While overall confidence remained stable, nearly every other indicator in the report
this month weakened.”
“The business environment is clearly challenging, with a record number of companies
reporting that the weak rupee was hurting business in October and that costs of raw
materials remained high. Still, the worst may now be over for businesses with most
indicators having recovered from a record low in April.”
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Notes to Editors
Please source all information to MNI Indicators.
MNI India Business Sentiment is a monthly poll of Indian business executives at
companies listed on BSE (formerly known as the Bombay Stock Exchange).
Companies are a mix of manufacturing, service, construction and agricultural firms.
Respondents are asked their opinion on whether a particular business activity has
increased, decreased or remained the same compared with the previous month as
well as their expectations for three months ahead, e.g. is Production
higher/same/lower compared with a month ago?
Diffusion indicators are then calculated by adding the percentage share of positive
responses to half the percentage of those respondents reporting no change. An
indicator reading above 50 shows expansion, below 50 indicates contraction and a
result of 50 means no change.
Data is collected via telephone interviews. Around 200 companies are surveyed each
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