MNI India Business Report
April 2014
Insight and data for better decisions
MNI India Business Report - April 20142
About MNI Indicators
Insight and data for better decisions
MNI Indicators offers u...
MNI India Business Report - April 2014 3
MNI India Business Report - April 2014
Contents
4	 Editorial
6	 Executive Summary...
Spitzzeile Titel4
Elections are usually periods of great uncertainty
but the continued rise in the Sensex as national
elec...
MNI India Business Report - April 2014 5
Elections are usually periods of great uncertainty but
the continued rise in the ...
Spitzzeile Titel6
Business confidence weakened at the start of the
new financial year in April, while expectations hit a
r...
MNI India Business Report - April 2014 7
The MNI India Business Indicator decreased to 61.9
in April from 65.5 in March, a...
MNI India Business Report - April 20148
Overview
Feb-14 Mar-14 Apr-14
Highest
Since
Lowest
Since
3-Month
Average
Monthly
C...
w
Business confidence
weakened in April,
while expectations
hit a record high...
...on hopes that a new government will ki...
Spitzzeile Titel10
Latest economic data from India have been
disappointing and dashed hopes of a quick recovery.
Economic ...
MNI India Business Report - April 2014 11
Latest economic data from India have been
disappointing and dashed hopes of a qu...
MNI India Business Report - April 201412
Governor Raghuram Rajan said that the Reserve
Bank’s policy stance will be firmly...
MNI India Business Report - April 2014 13
The government has proposed to bring down the
fiscal deficit to 4.6% of GDP in 2...
Spitzzeile Titel14
Business confidence weakened in April, although
sentiment was well above the same month a year
earlier,...
MNI India Business Report - April 2014 15
The MNI India Business Indicator decreased to 61.9
in April from 65.5 in March, ...
MNI India Business Report - April 201416
Production fell in April to the lowest since December,
but was well above the sam...
MNI India Business Report - April 2014 17
The New Orders Indicator increased for the first time
in three months, mainly le...
MNI India Business Report - April 201418
Export Orders have trended upwards since April last
year and this month’s fall pa...
MNI India Business Report - April 2014 19
Following a sharp decline at the end of 2013, the
Productive Capacity Indicator ...
Spitzzeile Titel20
w
More companies
reported that the
current level of the
rupee was helping
their business.
The Effect of...
MNI India Business Report - April 2014 21
Order Backlogs had fallen sharply over the past year
as the economy slowed consi...
MNI India Business Report - April 201422
The Employment Indicator asks companies whether
they have an adequate number of e...
MNI India Business Report - April 2014 23
The Indicator for the Inventory level of Finished Goods
increased by almost 5% t...
MNI India Business Report - April 201424
The majority of the companies in our panel continued
to pay higher or the same in...
MNI India Business Report - April 2014 25
The Prices Received Indicator rose sharply in April to
56.8 from 52.2 in March, ...
MNI India Business Report - April 201426
The Financial Position Indicator increased to 68.9 in
April from 67.2 in March, w...
MNI India Business Report - April 2014 27
The Interest Rates Paid Indicator declined for the
second consecutive month in A...
MNI India Business Report - April 201428
The Effect of the Rupee Exchange Rate Indicator
increased to 46.4 in April from 4...
MNI India Business Report - April 2014 29
After steadily increasing for four straight months, the
Supplier Delivery Times ...
MNI India Business Report - April 201430
The indicator measuring the Availability of Credit
accelerated to a series high o...
MNI India Business Report - April 2014 31
For the April survey, which was taken at the start of
the month, we asked our pa...
Spitzzeile Titel32
A selection of comments from the panel of
businesses surveyed over the past month.
What the Panel Said
“Due to lower demand, we have reduced the prices we
charge.” Paper manufacturing company
“Due to higher labour charges, we...
Spitzzeile Titel34
35 Historical Summary
36 Historical Records
37 Historical Records - Quarterly
Data Tables
MNI India Business Report - April 2014 35
Historical Summary
2013 2014
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr...
MNI India Business Report - April 201436
Historical Records
2012 - Current
Minimum Maximum Mean Median
MNI India Business ...
MNI India Business Report - April 2014 37
Historical Records - Quarterly
Q3 13 Q4 13 Q1 14 Quarterly Change Quarterly % Ch...
MNI India Business Report - April 201438
Methodology
MNI India Business Sentiment is a monthly poll of
Indian business exe...
Insight and data for better decisions
Discovering trends in Emerging
Markets
MNI‘s Emerging Markets Indicators explore att...
Published by
MNI Indicators | Deutsche Börse Group
Westferry House
11 Westferry Circus
London
E14 4HE
www.mni-indicators.c...
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MNI India Business Sentiment Report April 2014

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The MNI India Business Indicator fell to 61.9 in April following an end-of-the-year rise to 65.5 in March, although sentiment was well above the same month a year earlier.

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MNI India Business Sentiment Report April 2014

  1. 1. MNI India Business Report April 2014 Insight and data for better decisions
  2. 2. MNI India Business Report - April 20142 About MNI Indicators Insight and data for better decisions MNI Indicators offers unique macro-economic data and insight to businesses and the investment community. We produce data and intelligence that is unbiased, pertinent and responsive. Our data moves markets. MNI Indicators specialises in business and consumer focused macro-economic reports that give our customers the ability to make timely and relevant decisions. We strive to provide up-to-date information on business and consumer confidence on the economy. MNI Indicators publishes data on a monthly basis. Our indicators are based on a unique and proprietary methodology and are designed to present an advance picture of the economic landscape as perceived by businesses and consumers every month. Our monthly reports explore attitudes, perspectives and confidence across different countries and regions. They deliver in-depth analysis, highlight changing patterns and how these can affect potential developments in business and consumer activities. MNI Indicators is part of MNI, a leading provider of news and intelligence. MNI is a wholly owned subsidiary of Deutsche Börse Group, one of the largest worldwide exchange organisations. Written and researched by Philip Uglow, Chief Economist Shaily Mittal, Economist Release Time Embargoed until 9:45 a.m. New Delhi time April 23, 2014 MNI Indicators | Deutsche Börse Group Westferry House 11 Westferry Circus London E14 4HE Tel: +44 (0)20 7862 7444 Email: info@mni-indicators.com www.mni-indicators.com @MNIIndicators Copyright© 2014 MNI Indicators | Deutsche Börse Group. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved.
  3. 3. MNI India Business Report - April 2014 3 MNI India Business Report - April 2014 Contents 4 Editorial 6 Executive Summary 10 Economic Landscape 14 Indicators 15 MNI India Business Indicator 16 Production 17 New Orders 18 Export Orders 19 Productive Capacity 21 Order Backlogs 22 Employment 23 Inventories 24 Input Prices 25 Prices Received 26 Financial Position 27 Interest Rates Paid 28 Effect of Rupee Exchange Rate 29 Supplier Delivery Times 30 Availability of Credit 31 Special Question 32 What the Panel Said 34 Data Tables 38 Methodology
  4. 4. Spitzzeile Titel4 Elections are usually periods of great uncertainty but the continued rise in the Sensex as national elections get underway in India belies this. Election Fever
  5. 5. MNI India Business Report - April 2014 5 Elections are usually periods of great uncertainty but the continued rise in the Sensex as national elections get underway in India belies this. The Sensex hit a fresh all-time high of 22,740 on April 9, buoyed by international investors who see a post-election India being able to dig itself out of the economic hole it’s in. Recent opinion polls have shown the business friendly opposition BJP, led by Narendra Modi, holding a strong lead. The party has promised to kick-start the economy, improve infrastructure, contain inflation and promote foreign investment. The danger for equity markets is that they are strongly pricing in a Modi win. Elections are full of surprises and India’s opinion polls have been grossly inaccurate in each of the two previous national elections. In 2004, Congress won even after the polls suggested the BJP would retain power, leading the biggest single-day sell off of stocks in more than four years. In 2009, most opinion polls predicted a close fight, although Congress won with the largest tally in 20 years. Even if business positive Modi wins, the rally in equity markets has been nothing but spectacular given the current economic malaise, leaving them very open to disappointment. Our monthly Business and Consumer Sentiment surveys suggest that companies have turned the corner and appear optimistic that a new government will turn the economy around. Indian politicians are expected to spend around $5 billion on campaigning for elections – so at least this splurge would give India’s staggering economy a temporary boost! The important question is what will happen next? India’s diverse political landscape makes election results hard to forecast and there are still four weeks until the polls close. Whatever the outcome is, an unclear verdict or a weak government would worsen the situation. A stable government with clear reform objectives is a must for stronger economic growth in the coming years. Philip Uglow Chief Economist MNI Indicators
  6. 6. Spitzzeile Titel6 Business confidence weakened at the start of the new financial year in April, while expectations hit a record high on hopes that a new government will turnaround the economy. Executive Summary
  7. 7. MNI India Business Report - April 2014 7 The MNI India Business Indicator decreased to 61.9 in April from 65.5 in March, a fall of 5.5% on the month. The deceleration was mainly led by service sector companies, offsetting part of the gain seen in the previous month. Business sentiment remained stable for manufacturing and construction companies. India’s national elections started on April 7 and will conclude after a series of stages on May 12. Both businesses and markets are confident that economic conditions will improve when the new government is in power, with polls pointing to a win by pro-business BJP leader Narendra Modi. Expectations for business conditions in three months’ time increased significantly to 79.1 in April compared with 70.1 in March. The Future Expectations Indicator increased across all three sectors. For the April survey, which was taken at the start of the month, we asked our panel of the largest Indian companies how they think their business will perform after the general election. Only just over half of respondents, 51.5%, thought that their business will be better after the general election. A significant portion of companies, 38%, said that they were uncertain about how the elections would impact their businesses. An important concern was the stability of the government and its ability to push through reforms. Production fell in April to the lowest since December, but was well above the same level a year earlier. April marks the beginning of the new financial year for Indian companies and typically activity slows following a pick-up towards the end of the previous year. The New Orders Indicator increased for the first time in three months, mainly led by manufacturing and construction sector companies. The Employment Indicator which asks companies whether they have an adequate number of employees, remained broadly stable in April as the majority of companies continued to say that the number of employees they had was “just right”. The Prices Received Indicator rose sharply in April to 56.8 from 52.2 in March, the highest level since January. The Financial Position of companies increased to 68.9 in April from 67.2 in March, well above 53.4 recorded in the same month a year earlier. Interest Rates Paid declined for the second consecutive month in April to 55.3 from 57.6 in March as fewer companies reported that they paid higher interest rates compared with the previous month. The Effect of the Rupee Exchange Rate Indicator increased to 46.4 in April from 40.8 in March, the highest level since June last year as the proportion of companies who reported that the current level of the rupee was helping their business doubled compared with the previous month.
  8. 8. MNI India Business Report - April 20148 Overview Feb-14 Mar-14 Apr-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change MNI India Business Indicator Current Conditions 58.2 65.5 61.9 - Feb-14 61.9 -3.6 -5.5% Future Expectations 69.5 70.1 79.1 series high - 72.9 9.0 12.8% Production Current Conditions 62.0 64.8 62.0 - Dec-13 62.9 -2.8 -4.3% Future Expectations 69.7 67.7 70.6 Jan-14 - 69.3 2.9 4.3% New Orders Current Conditions 62.3 61.5 62.9 Jan-14 - 62.2 1.4 2.3% Future Expectations 67.2 70.9 76.9 Sep-13 - 71.7 6.0 8.5% Export Orders Current Conditions 59.8 67.4 61.7 - Feb-14 63.0 -5.7 -8.5% Future Expectations 68.2 70.6 68.8 - Feb-14 69.2 -1.8 -2.5% Productive Capacity Current Conditions 56.1 57.4 60.7 Nov-13 - 58.1 3.3 5.7% Future Expectations 60.0 67.5 70.7 series high - 66.1 3.2 4.7% Order Backlogs Current Conditions 39.8 50.0 55.4 May-13 - 48.4 5.4 10.8% Future Expectations 40.1 55.4 56.7 Sep-13 - 50.7 1.3 2.3% Employment Current Conditions 50.8 52.1 51.7 - Feb-14 51.5 -0.4 -0.8% Future Expectations 57.5 53.3 52.0 - Nov-13 54.3 -1.3 -2.4% Inventories Current Conditions 64.9 57.2 60.0 Feb-14 - 60.7 2.8 4.9% Future Expectations 53.5 58.8 51.3 - Oct-13 54.5 -7.5 -12.8% Input Prices Current Conditions 73.0 66.0 66.1 Feb-14 - 68.4 0.1 0.2% Future Expectations 72.0 64.0 58.0 - series low 64.7 -6.0 -9.4% Prices Received Current Conditions 56.2 52.2 56.8 Jan-14 - 55.1 4.6 8.8% Future Expectations 61.2 56.6 59.8 Feb-14 - 59.2 3.2 5.7% Financial Position Current Conditions 69.3 67.2 68.9 Feb-14 - 68.5 1.7 2.5% Future Expectations 77.2 76.1 79.6 Sep-13 - 77.6 3.5 4.6% Interest Rates Paid Current Conditions 67.3 57.6 55.3 - May-13 60.1 -2.3 -4.0% Future Expectations 60.7 52.8 50.7 - May-13 54.7 -2.1 -4.0% Effect of Rupee Exchange Rate Current Conditions 44.2 40.8 46.4 Jun-13 - 43.8 5.6 13.7% Future Expectations 45.2 45.5 54.4 Jul-13 - 48.4 8.9 19.6% Supplier Delivery Times Current Conditions 55.6 53.2 52.9 - Oct-13 53.9 -0.3 -0.6% Future Expectations 56.2 56.3 56.2 - Jan-14 56.2 -0.1 -0.2% Availability of Credit Current Conditions 54.9 59.6 63.1 series high - 59.2 3.5 5.9% Future Expectations 54.8 59.5 67.8 series high - 60.7 8.3 13.9%
  9. 9. w Business confidence weakened in April, while expectations hit a record high... ...on hopes that a new government will kick-start the economy after the national elections.
  10. 10. Spitzzeile Titel10 Latest economic data from India have been disappointing and dashed hopes of a quick recovery. Economic Landscape
  11. 11. MNI India Business Report - April 2014 11 Latest economic data from India have been disappointing and dashed hopes of a quick recovery. Industrial production fell in February following a small rise in January. Consumer price inflation ticked up again in March owing to higher food prices and the trade deficit widened to the highest level since October, due to higher gold imports in March. The Reserve Bank of India kept the policy rate unchanged at 8% at its April meeting, allowing the rate increases undertaken between September 2013 and January 2014 to work their way through the economy. However, there are increased fears that the monsoon will be below normal and put pressure on food prices and restrain further the RBI’s ability to ease policy later this year. Disappointing economic growth Economic growth in India slowed to 4.7% on the year in the three months to December, down from 4.8% in the previous quarter. It was, though, marginally above the 4.4% rate seen in the same period a year ago. Data on an output basis showed that growth was boosted by services which grew 7% on the year, compared with 4.2% in the previous quarter. A bountiful harvest was expected to translate into strong agricultural growth but output here was disappointing as it slowed to 3.6% compared with 4.6% in the previous quarter. Manufacturing fell back into contraction, declining by 1.9% compared with 1% growth in the previous quarter. The Finance Minister P Chidambaram expects the economy to grow by 4.9% this year and to accelerate to 6% in the next fiscal year. The economy must expand by 5.5% in the January-March quarter to achieve the forecast which on current evidence looks highly unlikely. The RBI has revised down its forecast for 2014 to 4.7% from 4.8% previously owing to weak industrial production and investment. This would be the first time in 26 years that growth will be below 5% for two successive years. Industrial output slumps Industrial production recorded the sharpest decline in nine months in February, falling by 1.9% on the year following a rise of 0.8% in January. Much of the decline was led by weakness in manufacturing output which contracted by 3.7% on the year following a 0.7% decline in January. Thirteen out of the 22 industry groups within the manufacturing sector contracted in February, led by a 34.1% fall in ‘Radio, TV and communication equipment & apparatus’, followed by 24.6% drop in ‘Electrical machinery & apparatus’ and 21.3% in ‘Wearing apparel; dressing and dyeing of fur’. After increasing 0.7% on the year in January, mining output grew by 1.4% in February. Output of consumer durables, a measure of consumer demand, posted the fifteenth consecutive decline, falling 9.3% in February compared with an 8.3% decline in the previous month. Capital goods output, a proxy for investment, fell sharply by 17.4% on the year, compared with a decline of 4.1% in January. Economic Growth 0% 2% 4% 6% 8% 10% 12% Q12009 Q32009 Q12010 Q32010 Q12011 Q32011 Q12012 Q32012 Q12013 Q32014 GDP Y/Y % , fiscal year Source: Central Statistical Organisation, India
  12. 12. MNI India Business Report - April 201412 Governor Raghuram Rajan said that the Reserve Bank’s policy stance will be firmly focused on keeping the economy on a disinflationary glide path that is intended to hit 8% inflation by January 2015 and 6% by January 2016. A central bank panel recently proposed to revamp its policymaking structure by setting a long-term consumer price inflation target of 4%, plus or minus 2%. As inflation remains high, it recommended that the goal should be phased in gradually. Rajan has said that if inflation falls as expected, further policy tightening in the near term is not anticipated. Inflation ticks up Consumer price inflation rose for the first time in four months to 8.3% compared with a revised 8% rate in February. The rise was driven by an increase in food prices. Food price inflation, which makes up almost half of the basket, increased to 9.1% from 8.6% in the previous month. Softer prices for clothing, footwear, public transport and communication helped to keep core CPI unchanged from the previous month at 7.9%. Wholesale price inflation rose sharply to 5.7% in March from a nine month low of 4.7% in February, with both food and fuel inflation increasing but also a general rise in the price of manufactured goods. In the coming months, there are additional risks of less-than-normal monsoon rains due to possible El Niño effects, which could have a negative impact on India’s agricultural output. Repo rate unchanged at 8% The RBI left the key policy rate unchanged at 8% at its first bi-monthly monetary policy of the financial year on April 1. Inflation 0% 2% 4% 6% 8% 10% 12% Apr-12 Jun-12 Aug-12 Oct-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Wholesale Price Inflation* Consumer Price Inflation** Source: *Office of the Economic Advisor, India, **MOSPI Industrial Production -10% -5% 0% 5% 10% 15% 20% 25% 50 100 150 200 250 2007 2008 2009 2010 2011 2012 2013 2014 Industrial Production y/y % (RHS) Industrial Production Source: Central Statistical Organisation, India Fiscal budget deficit The government budget deficit stood at Rs. 5.99 trillion in the April-February period, or 114.3% of the target for the year ending March 2014, compared with 97.4% at the same point a year ago. Net tax receipts totalled Rs. 6.27 trillion in the first eleven months to March, while total expenditure was about Rs. 14 trillion.
  13. 13. MNI India Business Report - April 2014 13 The government has proposed to bring down the fiscal deficit to 4.6% of GDP in 2013-14. It plans to defer some subsidy payments to next year, while focusing on speeding up the sale of stakes in state- run firms and minority stakes in some private companies. The government raised over Rs. 610 billion from selling licences for the mobile internet spectrum in February. The fiscal deficit for 2014-15 is projected at 4.1% of GDP and 3% of GDP in 2016-17. Foreign reserves rise Foreign exchange reserves rose to $306.7 billion in the week ending April 4, from $303.7 billion a week earlier. This was the sixth consecutive week they have increased as overseas investors poured money into the stock market. According to the RBI’s weekly statistical supplement, foreign currency assets, the biggest component of the forex reserves, rose by $2.4 billion to $278.8 billion. These are expressed in dollar terms and include the effect of appreciation or depreciation of the non-US currencies such as the euro, pound and yen, held in its reserves. Moves by the RBI over the months have greatly strengthened India’s foreign exchange reserve position, leaving the country less vulnerable to another run on the currency. The value of India’s gold reserves increased to $21.6 billion from $21 billion a week earlier. Trade deficit widens in March India’s trade deficit widened to a five month high in March to $10.5 billion, up from $8.1 billion in February. Exports declined for the second consecutive month on the year to $29.6, 3.2% below the level seen last year, although 15.1% above February’s $25.7 billion. Imports fell 2.1% on the year to $40.1 billion in March and were 18.5% above the $33.8 billion recorded in February. Oil imports climbed from February’s $13.7 billion to $15.8 billion in March, the highest in 24 months. Gold imports rose to $2.7 billion from $1.6 billion in February, suggesting that underlying demand for gold is still firm and would increase if import curbs were lifted. For the fiscal year 2013-14, the trade deficit narrowed to $138.6 billion, down from $189.6 in the previous year aided by a rise in exports and fall in imports. The current account deficit narrowed to $4.2 billion, or 0.9% of GDP in the October-December quarter, from $31.9 billion a year earlier, on the back of curbs on gold imports and a moderate pick-up in exports. The government expects to keep the current account deficit at $45 billion in the fiscal year that ends in March. Car sales shrink in 2013 Passenger car sales decelerated by 4.7% in the fiscal year that ended on March 31, the second consecutive year of decline. For the year as a whole, car sales totalled 17.9 billion, down from 18.7 billion in the previous year. In March, car sales increased by 6.7% over the previous month but were 5.1% below March 2013’s level. Many consumers in India have chosen to defer purchases of vehicles given the slowdown in the economy, higher loan rates and rising fuel prices. The automobile industry is optimistic that sales will increase in 2014 as the economy rebounds and interest rates and inflation stabilise. Companies are looking forward to the new government’s budget to see if the excise tax cut from 12% to 8% that was announced in the interim budget in February will be continued. Many car makers are launching compact cars to attract price sensitive customers and there have been reports that various new car models have generated a lot of interest and are expected to boost sales.
  14. 14. Spitzzeile Titel14 Business confidence weakened in April, although sentiment was well above the same month a year earlier, while expectations hit a record high on hopes that a new government will kick-start the economy after the national elections. Indicators
  15. 15. MNI India Business Report - April 2014 15 The MNI India Business Indicator decreased to 61.9 in April from 65.5 in March, a fall of 5.5% on the month. The deceleration was mainly led by service sector companies, offsetting part of the gain seen in the previous month. Business sentiment remained stable for manufacturing and construction companies. While the Business Indicator fell in April it was well above the 47.5 level seen in April 2013. Business confidence was hit hard in the first half of 2013 as India faced a potential financial meltdown following fears the US Federal Reserve would taper its bond purchases, which caused widespread panic in all emerging markets. Business sentiment has subsequently recovered and has trended higher since the summer of 2013, indicating that the worst is over for the Indian economy. India’s national elections started on April 7 and will conclude after a series of stages on May 12. Both businesses and markets are confident that economic conditions will improve when the new government is in power, with polls pointing to a win by pro-business BJP leader Narendra Modi. Expectations for Business Conditions in three months’ time increased significantly to 79.1 in April compared with 70.1 in March. The Future Expectations Indicator increased across all three sectors. In April, six out of the 15 current conditions indicators included in the survey declined. For business expectations in the next three months, three indicators rose to series’ highs and nine rose compared with the previous month. 61.9 MNI India Business Indicator Business Confidence Weakens MNI India Business Indicator Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 47.5 64.6 57.8 63.4 58.2 65.5 61.9 Future Expectations 49.7 69.5 71.1 72.0 69.5 70.1 79.1 40 45 50 55 60 65 70 75 80 85 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 MNI India Business Indicator Current Conditions Future Expectations “The overall business situation in the coming months will depend on the upcoming election‘s results.” Diversified Industrials manufacturing company “Unless and until there is a change in the RBI’s key policy rates, there will be no change in business conditions.” Investment services company
  16. 16. MNI India Business Report - April 201416 Production fell in April to the lowest since December, but was well above the same level a year earlier. April marks the beginning of the new financial year for Indian companies and typically activity slows following a pick-up towards the end of the previous year. The Production Indicator declined to 62.0 in April from 64.8 in the previous month. Production bottomed out in the spring a year ago and has subsequently been on a rising trend, averaging 60.0 over the past 12 months. Service and construction sector companies reported a decline in the Production Indicator while it remained broadly stable for manufacturing companies. Latest official data showed that industrial production contracted in February by 1.9% on the year, having shown a small rise in January. Manufacturing, which constitutes over 75% of industrial production, declined 3.7% after remaining flat in January and well below the growth of 2.1% in the same month a year ago. Expectations for Production over the next three months rose after declining for two months in a row. The Future Expectations Indicator increased to 70.6 from 67.7 in March. Service sector companies were more optimistic about the future level of production. Fewer construction sector companies expected their production to rise in three months‘ time, while the Expectations Indicator for manufacturing companies remained broadly stable. Production Slows in April Production Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 41.0 65.3 59.7 64.4 62.0 64.8 62.0 Future Expectations 41.3 68.8 66.2 71.6 69.7 67.7 70.6 62.0 30 35 40 45 50 55 60 65 70 75 80 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Production Current Conditions Future Expectations Industrial Production -3% -2% -1% 0% 1% 2% 3% 4% 30 35 40 45 50 55 60 65 70 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Industrial Production y/y % (RHS)* MNI Production *Source: Central Statistical Organisation, India
  17. 17. MNI India Business Report - April 2014 17 The New Orders Indicator increased for the first time in three months, mainly led by manufacturing and construction sector companies. The indicator increased to 62.9 in April from 61.5 in March and was well above the level seen in April a year ago, when the economy bottomed out as shown by our survey results. Expectations for New Orders in three months rose for the fourth consecutive month to 76.9 in April compared with 70.9 in the previous month. The rise in the indicator was across the board, with most companies looking forward to the higher demand of the summer season and an improved business environment after a new government is elected. New Orders Highest Since January New Orders Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 39.7 62.9 60.3 63.6 62.3 61.5 62.9 Future Expectations 40.4 68.5 65.4 65.5 67.2 70.9 76.9 62.9 30 40 50 60 70 80 90 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 New Orders Current Conditions Future Expectations “Our order book has increased due to our marketing effort as well as world trade exhibition.” Tobacco manufacturing company “There is uncertainty towards future orders as people are waiting for elections to end and will then make investments in residential and commercial spaces.” Real Estate Holding & Development company
  18. 18. MNI India Business Report - April 201418 Export Orders have trended upwards since April last year and this month’s fall partially offset the gain seen in March. The Export Orders Indicator declined to 61.7 in April from 67.4 in the previous month. Fewer manufacturing and service sector companies reported higher export orders, the former being the most optimistic among the three sectors. The depreciation of the rupee has increased the competitiveness of Indian exports, although rising import costs have offset much of this gain for a lot of companies. Also, the rupee rose as high as 59.72 against the US Dollar in late March and has gained 3.7% so far in April and if this trend continues, it will impact export orders negatively. Companies’ future expectations about Export Orders declined for the first time in three months. The Expectations Indicator fell from 70.6 in March to 68.8 in April. Manufacturing and construction sector companies were less optimistic about future Export Orders, although the indicator remained broadly stable among service companies. Export Orders Shrink Significantly 61.7 30 35 40 45 50 55 60 65 70 75 80 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Export Orders Current Conditions Future Expectations Export Orders Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 41.3 58.8 60.5 61.4 59.8 67.4 61.7 Future Expectations 45.2 60.8 67.9 62.9 68.2 70.6 68.8 Export Orders Movement 20 30 40 50 60 70 20 22 24 26 28 30 32 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 MNI Export Orders (RHS) Exports,FOB, USD B* *Source: Indian Ministry of Commerce and Industry
  19. 19. MNI India Business Report - April 2014 19 Following a sharp decline at the end of 2013, the Productive Capacity Indicator has recovered and rose to 60.7 in April compared with 57.4 in the previous month. The Productive Capacity Indicator has been above the 50 breakeven mark since May, and averaged 56.7 in the 12 months to April. Productive Capacity improved significantly among construction companies, as the indicator rose to the highest level in 10 months. Manufacturing companies witnessed a small decline in Productive Capacity. Companies’ expectations about Productive Capacity in the next three months improved to a series high, as the Future Expectations Indicator rose by 4.7% to 70.7 in April from 67.5 in March. The Expectations Indicator improved for both construction and manufacturing sector companies. Productive Capacity Future Expectations Hit Series High 60.7 30 35 40 45 50 55 60 65 70 75 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Productive Capacity Current Conditions Future Expectations Productive Capacity Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 41.0 61.3 51.3 58.0 56.1 57.4 60.7 Future Expectations 40.7 65.2 57.5 64.3 60.0 67.5 70.7
  20. 20. Spitzzeile Titel20 w More companies reported that the current level of the rupee was helping their business. The Effect of the Rupee Exchange Rate Indicator increased to 46.4 in April from 40.8 in March, the highest level since June last year.
  21. 21. MNI India Business Report - April 2014 21 Order Backlogs had fallen sharply over the past year as the economy slowed considerably, although have picked up since January potentially signalling a bounce back in demand. The indicator moved above the 50 breakeven level that separates expansion from contraction in April to 55.4, up from 50.0 in March, the highest since May 2013. Companies expected a rise in Order Backlogs over the next three months in anticipation of higher demand. The Future Expectations Indicator increased to 56.7 from 55.4 in March. More manufacturing companies expected higher backlogs in the coming months while construction companies expected them to contract. Order Backlogs Rise Markedly 55.4 25 30 35 40 45 50 55 60 65 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Order Backlogs Current Conditions Future Expectations Order Backlogs Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 57.8 45.3 41.7 35.6 39.8 50.0 55.4 Future Expectations - 48.8 43.7 35.2 40.1 55.4 56.7 “We anticipate higher order backlogs in the coming months due to higher expected new orders.” Electricity manufacturing company
  22. 22. MNI India Business Report - April 201422 The Employment Indicator asks companies whether they have an adequate number of employees, and it remained broadly stable in April as the majority of companies continued to say that the number of employees they had was “just right”. The Employment Indicator remained broadly stable at 51.7 compared with 52.1 in March, although there was a significant rise in those who said their number of employees was “not enough”. Employment rose among manufacturing sector companies, while it declined for services companies, both remaining above the 50 mark that separates whether they have the right number of employees or not. The Indictaor for construction companies remained stable at 50. Companies’ expectations about future employment declined for the second month in a row after hitting a record high in February. The Expectations Indicator fell to the lowest level since November 2013 to 52.0 in April compared with 53.3 in the previous month. Hard hit manufacturing companies expected employment levels to contract in the coming three months as a growing proportion of companies expected to have too many employees. The indicator rose for construction companies and fell for service companies, although both were well above the 50 mark, indicating future demand for workers. Employment Future Expectations Dampen 51.7 40 42 44 46 48 50 52 54 56 58 60 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Employment Current Conditions Future Expectations Employment Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 53.2 48.9 50.0 51.8 50.8 52.1 51.7 Future Expectations - 49.5 52.2 53.4 57.5 53.3 52.0 “We have an adequate number of employees. However, we are short of skilled employees due to high attrition.” Auto parts manufacturing company
  23. 23. MNI India Business Report - April 2014 23 The Indicator for the Inventory level of Finished Goods increased by almost 5% to 60.0 from 57.2 in the previous month led mainly by manufacturing companies. Many companies reported that business activity would be slow until the elections ended, leading to a build-up of stocks. Companies expected their Inventories of Finished Goods to decline in the next three months with the Expectations Indicator falling significantly to 51.3 from 58.8 in March. Between March and April, a significantly lower proportion of manufacturing and construction companies expected inventories to rise as it was generally perceived that inventories would be depleted due to greater demand in the coming months. Inventories Future Expectations Fall Sharply 60.0 25 30 35 40 45 50 55 60 65 70 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Inventories Current Conditions Future Expectations Inventories Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 59.9 50.0 53.1 62.1 64.9 57.2 60.0 Future Expectations - 53.3 54.6 59.5 53.5 58.8 51.3
  24. 24. MNI India Business Report - April 201424 The majority of the companies in our panel continued to pay higher or the same input prices in April, although the Input Prices Indicator remained broadly stable compared with the previous month. The Input Price Indicator stood at 66.1 in April compared with 66.0 in March but significantly below February’s 73.0. The Indicator for manufacturing and construction sector companies decreased, while it rose for service sector companies. Input Prices remained uncomfortably high throughout 2013 with the indicator rising to 73.5 in the quarter ending September. The first three months of 2014 saw the indicator fall as low as 69.6 and this month’s stability provides relief to companies suffering from the high cost of inputs. Expectations for three months’ time decelerated to a series low of 58.0 in April, down from 64.0 in the previous month, driven by a fall in expectations across all three sectors. Input Prices Future Expectations Hit Series Low 66.1 45 50 55 60 65 70 75 80 85 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Input Prices Current Conditions Future Expectations Input Prices Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 67.9 73.0 71.8 69.8 73.0 66.0 66.1 Future Expectations - 72.5 66.4 69.9 72.0 64.0 58.0 “Fuel prices have increased and hence input costs are high.” Electricity manufacturing company “Excise tax has gone down, so it will help in managing our costs.” Consumer Finance service company
  25. 25. MNI India Business Report - April 2014 25 The Prices Received Indicator rose sharply in April to 56.8 from 52.2 in March, the highest level since January. The increase in the Prices Received Indicator over the past year has been closely matched by the official inflation data. Latest data showed that wholesale price inflation rose to 5.7% in March from 4.7% in February, led by higher food and fuel prices. Expectations for Prices Received in three months’ time also rose to 59.8 from 56.6 in March. Between March and April, the proportion of service sector companies who expected the prices charged for their goods to rise in the coming months, almost doubled. Manufacturing companies also expected a rise but a growing proportion of construction companies expected them to fall in the coming three months. Prices Received Rises Significantly 56.8 30 35 40 45 50 55 60 65 70 75 80 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Prices Received Current Conditions Future Expectations Prices Received Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 42.2 60.8 58.0 60.6 56.2 52.2 56.8 Future Expectations 45.1 63.8 56.0 60.9 61.2 56.6 59.8 3% 4% 5% 6% 7% 8% 9% 30 40 50 60 70 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 Prices Received and Wholesale Price Inflation MNI Prices Received Wholesale Price Inflation y/y % (RHS)* *Source: Office of the Economic Advisor, India “If the rupee becomes weaker, then we will increase the prices we charge as our import costs would increase.” Speciality Chemicals manufacturing company
  26. 26. MNI India Business Report - April 201426 The Financial Position Indicator increased to 68.9 in April from 67.2 in March, well above 53.4 recorded in the same month a year earlier. Between March and April, the indicator for construction sector companies rose to the highest level in 10 months as the majority of companies reported an improvement in their financial situation. Service sector companies reported a slight improvement in the indicator, although the majority said it was the same as the previous month. Manufacturing companies, which have been hit hard by the economic slowdown, were less optimistic about their financial position. The BSE benchmark Sensex rose to a record high of 22,740.04 on April 9 helped by positive overseas investors, who bought Indian shares worth 7.03 billion rupees, totalling nearly $4.5 billion so far in 2014. More recently the Sensex, along with other Asian markets, have slipped following weak Chinese data and increased tensions in Ukraine. Companies, across all three sectors, were more optimistic about their financial position in the coming three months as the Expectations Indicator rose to 79.6 in April from 76.1 in the previous month. Financial Position Strengthens in April 68.9 45 50 55 60 65 70 75 80 85 90 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Financial Position Current Conditions Future Expectations Financial Position Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 53.4 69.9 65.2 68.2 69.3 67.2 68.9 Future Expectations 56.0 74.2 71.3 71.5 77.2 76.1 79.6 “If interest rates are lowered, our financial position may improve.” Real Estate Holding & Development company “Our financial position will improve in the next three months as the summer season brings more revenue.” Hotel
  27. 27. MNI India Business Report - April 2014 27 The Interest Rates Paid Indicator declined for the second consecutive month in April to 55.3 from 57.6 in March as fewer companies reported that they paid higher interest rates compared with the previous month. The Indicator fell across all sectors, with construction posting the largest decline, falling into contraction for the first time in 10 months. While in March, 25.8% of the companies surveyed reported higher credit costs, in April this fell to almost 20%. In contrast, the percentage of companies who reported they faced the same interest rates increased from 63.5% in March to 70.8% in April. The RBI kept the key policy rate unchanged at 8% at its monetary policy meeting on April 1 allowing the rate increases between September 2013 and January 2014 to work their way through the economy. Governor Raghuram Rajan said that the Reserve Bank‘s policy stance will be firmly focused on keeping the economy on a disinflationary glide path. Expectations for Interest Rates Paid remained high throughout most of last year with the indicator hitting a record high in June, although it has trended down since November. Between March and April, an increasing proportion of companies expected to see lower credit costs in the next three months. The Expectations Indicator declined from 52.8 in March to 50.7 in April, very close to a record low of 50.0 recorded in May 2013. Interest Rates Paid Lowest Since May 2013 53.3 45 50 55 60 65 70 75 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Interest Rates Paid Current Conditions Future Expectations Interest Rates Paid Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 52.9 73.2 69.2 60.5 67.3 57.6 55.3 Future Expectations 52.9 69.6 56.8 57.9 60.7 52.8 50.7 Manufacturing companies expected Interest Rates Paid in the next three months to contract while for services companies, the indicator fell to the breakeven level. In contrast, the expectations indicator for construction companies increased significantly above the 50 level.
  28. 28. MNI India Business Report - April 201428 The Effect of the Rupee Exchange Rate Indicator increased to 46.4 in April from 40.8 in March, the highest level since June last year as the proportion of companies who reported that the current level of the rupee was helping their business doubled compared with the previous month. Businesses are asked whether the exchange rate is helping or hurting their company and a value above 50 shows more firms reported that it was helping, while a reading below 50 shows the exchange rate was hurting. The indicator has moved sharply over the past year in line with the movement in the exchange rate. In March 2013, the indicator stood at 69.1, showing businesses were benefitting from the rupee. The indicator fell into contraction in July, before hitting a record low in October and has since partially recovered in line with the recovery in the rupee, although has remained below the 50 mark. From the start of the month until April 15, the rupee was 3.7% up on the same period a month earlier. Appreciation in the currency helps the majority of the Indian companies due to their dependence on imports of fuel and other raw materials. Companies expected the rupee to start helping their businesses in the coming three months. The Expectations Indicator increased considerably to 54.4 in April from 45.5 in March. This was the first time the indicator has climbed above the breakeven level since July 2013, before the sharp depreciation in the currency. Effect of Rupee Exchange Rate Will Help Business In the Future 46.4 20 30 40 50 60 70 80 90 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Effect of Rupee Exchange Rate Current Conditions Future Expectations Effect of Rupee Exchange Rate Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 47.8 43.4 39.4 44.3 44.2 40.8 46.4 Future Expectations 54.2 43.5 43.2 43.6 45.2 45.5 54.4 0.000 0.002 0.004 0.006 0.008 0.010 0.012 0.014 0.016 0.018 0.020 0 10 20 30 40 50 60 70 80 90 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 Exchange Rate MNI Effect of Rupee Exchange Rate US Dollar versus Indian Rupee (RHS)* *Source: Reuters
  29. 29. MNI India Business Report - April 2014 29 After steadily increasing for four straight months, the Supplier Delivery Times Indicator shortened in March to 53.2 and remained broadly stable in April at 52.9. Supplier Delivery Times were expected to remain broadly stable over the next three months as well, with the Future Expectations Indicator standing at 56.2 in April compared with 56.3 in March. Manufacturing companies expected supplier delivery times to lengthen while construction companies expected the opposite, with both above the breakeven level. Supplier Delivery Times Broadly Stable 52.9 30 35 40 45 50 55 60 65 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Supplier Delivery Times Current Conditions Future Expectations Supplier Delivery Times Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 51.9 52.9 54.2 54.4 55.6 53.2 52.9 Future Expectations - 55.0 54.2 51.7 56.2 56.3 56.2
  30. 30. MNI India Business Report - April 201430 The indicator measuring the Availability of Credit accelerated to a series high of 63.1 in April from 59.6 in March. After falling to a record low in April 2013, the trend for Credit Availability has been positive and the rise on the month puts the indicator over 50% above the same period a year ago. More service sector companies registered an increase in credit availability and manufacturing companies’ credit availability improved slightly to the highest level in seven months. In contrast, the proportion of construction companies who experienced better credit availability declined compared with the previous month. Businesses also expected credit availability to improve considerably in the next three months as the Future Expectations Indicator increased to a series high of 67.8 from 59.5 in March. The increase was broad- based across the three sectors. Availability of Credit Hits a Series High 63.1 30 35 40 45 50 55 60 65 70 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Availability of Credit Current Conditions Future Expectations Availability of Credit Apr-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 Current Conditions 41.1 55.7 52.6 56.8 54.9 59.6 63.1 Future Expectations 40.9 59.2 58.8 54.1 54.8 59.5 67.8 “Many banks are ready to give us credit because of our company’s track record.” Heavy construction company “Credit availability is a bit problematic.” Industrial machinery manufacturing company
  31. 31. MNI India Business Report - April 2014 31 For the April survey, which was taken at the start of the month, we asked our panel of the largest Indian companies how they think their business will perform after the general election. Indian elections started on April 7 and will take place in a series of stages until May 12. Only just over half of respondents, 51.5%, thought that their business will be better after the general election. 9.9% of respondents thought that their business performance will remain the same and less than 1% thought it would worsen. A significant portion of companies, 38%, said that they were uncertain about how the elections would impact their business. An important concern was the stability of the government and its ability to push through reforms. The BJP party is widely seen as benefiting from the rising popularity of its pro-business prime ministerial candidate, Narendra Modi. Latest opinion polls suggest that the BJP and its allies could win the majority of legislative seats in the national elections. Special Question How do you think your business will perform after the election? 51.5% 9.9% 0.7% 37.9% How do you think your business will perform after the general election? “Business conditions will improve only if the new government is stable.” Heavy construction company “We have the same set of clients and a fixed number of orders. So there will not be any impact due to elections.” Food products manufacturing company “If BJP party gets elected, business scenario might improve.” Consumer goods manufacturing company “Due to political stability after change in the government, there may be favourable policies for sugar industries.” Food Products manufacturing company Better Worse Same Don‘t Know “Market will be better after a stable election outcome.” Software Services company “We expect a better performance as probably goods and services tax will come into effect after the new government is formed.” Consumer Electronics manufacturing company “The new government would take at least 6-8 months to get their policies rolling.” Real Estate Holding & Development company “If BJP comes to power, there is hope for betterment.” Asset management company
  32. 32. Spitzzeile Titel32 A selection of comments from the panel of businesses surveyed over the past month. What the Panel Said
  33. 33. “Due to lower demand, we have reduced the prices we charge.” Paper manufacturing company “Due to higher labour charges, we have increased the prices charged for our goods.” Heavy construction company “Fuel prices have increased and hence input costs are high.” Electricity manufacturing company “We expect higher orders May onwards.” Consumer Finance services company “Cement and steel prices have increased.” Real estate Holding and Development company “Due to an increment in salary of employees, the input costs to our company are higher.” Software services company “Unless and until there is a change in the RBI’s key policy rates, there will be no change in business conditions.” Investment services company “We got six more clients this month.” Investment services company “New orders have started coming in.” Containers & packaging manufacturing company “There is uncertainty towards future orders as people are waiting for elections to end and will then make investments in residential and commercial spaces.” Real Estate Holding & development company “We expect higher demand in the coming months and are sales and marketing team is working towards it.” Hotelier Group “Our profitability has increased by 10%.” Mortgage Finance company “We have just the right number of employees.” Pharmaceuticals manufacturing company “We have an adequate number of employees. However, we are short of skilled employees due to high attrition.” Auto parts manufacturing company “If rupee becomes weaker, then we will increase the prices we charge as our import costs would increase.” Speciality chemicals manufacturing company “We anticipate higher order backlogs in the coming months due to higher expected new orders. “ Electricity Manufacturing company “Our financial position will improve in the next three months as the summer season brings more revenue.” Hotelier “We hope that the overall business conditions would improve after election. Single party with majority should come to power.” Water manufacturing company “If interest rates are lowered, our financial position may improve.” Real Estate Holding & Development company “The overall business situation in the coming months will depend on the upcoming election‘s results.” Diversified Industrials manufacturing company “Credit availability is a bit problematic.” Industrial Machinery manufacturing company “We will raise our prices in the coming months due to expected higher demand during summer vacations.” Hotelier “Summer holidays are good for our business, so the coming months will see increased business activity.” Recreational services company “Improvement in the US economy is boosting our business.” Investment services company “The new government would take atleast 6-8 months to get their policies rolling.” Real Estate Holding & Development company “Many banks are ready to give us credit because of our company’s track record.” Heavy construction company “Excise tax has gone down, so it will help in managing our costs.” Consumer Finance service company MNI India Business Report - April 2014 33
  34. 34. Spitzzeile Titel34 35 Historical Summary 36 Historical Records 37 Historical Records - Quarterly Data Tables
  35. 35. MNI India Business Report - April 2014 35 Historical Summary 2013 2014 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr MNI India Business Indicator Current Conditions 47.5 50.5 60.6 51.8 64.0 59.4 59.8 64.6 57.8 63.4 58.2 65.5 61.9 Future Expectations 49.7 52.0 60.6 67.6 75.5 77.1 68.8 69.5 71.1 72.0 69.5 70.1 79.1 Production Current Conditions 41.0 45.6 54.8 56.9 59.9 67.3 57.5 65.3 59.7 64.4 62.0 64.8 62.0 Future Expectations 41.3 51.6 59.4 76.3 71.8 76.8 64.8 68.8 66.2 71.6 69.7 67.7 70.6 New Orders Current Conditions 39.7 44.9 58.7 61.9 64.0 69.1 59.5 62.9 60.3 63.6 62.3 61.5 62.9 Future Expectations 40.4 46.4 58.4 76.8 75.0 78.5 69.5 68.5 65.4 65.5 67.2 70.9 76.9 Export Orders Current Conditions 41.3 43.7 52.9 57.7 55.0 63.2 55.6 58.8 60.5 61.4 59.8 67.4 61.7 Future Expectations 45.2 50.9 62.6 68.9 62.6 75.5 57.7 60.8 67.9 62.9 68.2 70.6 68.8 Productive Capacity Current Conditions 41.0 45.6 50.6 55.4 61.7 64.0 58.1 61.3 51.3 58.0 56.1 57.4 60.7 Future Expectations 40.7 50.9 56.7 68.8 67.4 70.3 65.1 65.2 57.5 64.3 60.0 67.5 70.7 Order Backlogs Current Conditions 57.8 59.3 48.5 49.4 47.0 52.9 42.9 45.3 41.7 35.6 39.8 50.0 55.4 Future Expectations - 59.6 32.8 43.6 39.4 57.5 43.4 48.8 43.7 35.2 40.1 55.4 56.7 Employment Current Conditions 53.2 51.8 52.3 51.3 54.1 53.3 51.3 48.9 50.0 51.8 50.8 52.1 51.7 Future Expectations - 51.8 52.3 53.6 52.0 53.4 51.1 49.5 52.2 53.4 57.5 53.3 52.0 Inventories Current Conditions 59.9 47.8 48.9 55.9 51.6 60.1 50.0 50.0 53.1 62.1 64.9 57.2 60.0 Future Expectations - 48.6 31.0 35.5 52.9 53.7 50.7 53.3 54.6 59.5 53.5 58.8 51.3 Input Prices Current Conditions 67.9 64.4 78.6 79.6 66.7 74.1 63.3 73.0 71.8 69.8 73.0 66.0 66.1 Future Expectations - 66.9 74.9 74.0 62.1 72.9 65.3 72.5 66.4 69.9 72.0 64.0 58.0 Prices Received Current Conditions 42.2 41.5 50.8 67.1 56.6 61.8 54.9 60.8 58.0 60.6 56.2 52.2 56.8 Future Expectations 45.1 47.3 49.2 73.7 57.0 67.0 57.3 63.8 56.0 60.9 61.2 56.6 59.8 Financial Position Current Conditions 53.4 56.1 63.0 57.6 68.1 72.3 58.6 69.9 65.2 68.2 69.3 67.2 68.9 Future Expectations 56.0 53.5 63.1 73.3 78.0 83.3 71.1 74.2 71.3 71.5 77.2 76.1 79.6 Interest Rates Paid Current Conditions 52.9 52.8 67.2 68.6 64.8 68.4 60.3 73.2 69.2 60.5 67.3 57.6 55.3 Future Expectations 52.9 50.0 71.7 65.9 70.2 65.2 65.9 69.6 56.8 57.9 60.7 52.8 50.7 Effect of Rupee Exchange Rate Current Conditions 47.8 53.3 66.6 45.1 39.6 31.6 30.9 43.4 39.4 44.3 44.2 40.8 46.4 Future Expectations 54.2 49.4 73.1 55.8 43.8 32.7 30.1 43.5 43.2 43.6 45.2 45.5 54.4 Supplier Delivery Time Current Conditions 51.9 53.1 59.6 57.1 52.5 58.4 52.7 52.9 54.2 54.4 55.6 53.2 52.9 Future Expectations - 59.0 39.5 50.9 49.6 56.1 54.6 55.0 54.2 51.7 56.2 56.3 56.2 Availability of Credit Current Conditions 41.1 44.8 51.3 57.1 56.3 61.9 51.3 55.7 52.6 56.8 54.9 59.6 63.1 Future Expectations 40.9 47.9 52.2 60.9 59.0 65.3 56.6 59.2 58.8 54.1 54.8 59.5 67.8
  36. 36. MNI India Business Report - April 201436 Historical Records 2012 - Current Minimum Maximum Mean Median MNI India Business Indicator Current Conditions 47.5 65.5 58.7 59.6 Future Expectations 49.7 79.1 66.1 69.5 Production Current Conditions 41.0 67.3 58.6 59.6 Future Expectations 41.3 76.8 64.1 67.7 New Orders Current Conditions 39.7 69.1 56.9 59.9 Future Expectations 40.4 78.5 64.5 67.2 Export Orders Current Conditions 41.3 67.4 56.1 57.7 Future Expectations 45.2 75.5 62.2 62.6 Productive Capacity Current Conditions 41.0 64.0 54.9 56.3 Future Expectations 40.7 70.7 61.1 64.3 Order Backlogs Current Conditions 35.6 59.3 48.1 48.5 Future Expectations 32.8 59.6 46.4 43.7 Employment Current Conditions 48.9 54.1 51.7 51.8 Future Expectations 49.5 57.5 52.7 52.3 Inventories Current Conditions 47.8 64.9 55.5 55.9 Future Expectations 31.0 59.5 50.3 53.1 Input Prices Current Conditions 63.3 79.6 70.3 69.8 Future Expectations 58.0 74.9 68.2 68.4 Prices Received Current Conditions 41.5 67.1 54.9 55.8 Future Expectations 45.1 73.7 57.9 57.3 Financial Position Current Conditions 53.4 72.3 62.6 62.8 Future Expectations 51.6 83.3 69.1 71.5 Interest Rates Paid Current Conditions 52.8 73.2 63.5 65.5 Future Expectations 50.0 71.7 61.0 62.2 Effect of Rupee Exchange Rate Current Conditions 30.9 77.8 50.2 45.8 Future Expectations 30.1 75.5 50.4 45.5 Supplier Delivery Time Current Conditions 51.9 59.6 54.5 53.2 Future Expectations 39.5 59.0 53.3 54.8 Availability of Credit Current Conditions 41.1 63.1 53.4 54.3 Future Expectations 40.9 67.8 56.6 57.6
  37. 37. MNI India Business Report - April 2014 37 Historical Records - Quarterly Q3 13 Q4 13 Q1 14 Quarterly Change Quarterly % Change MNI India Business Indicator Current Conditions 58.4 60.7 62.4 1.7 2.8% Future Expectations 73.4 69.8 70.5 0.7 1.0% Production Current Conditions 61.4 60.8 63.7 2.9 4.8% Future Expectations 75.0 66.6 69.7 3.1 4.7% New Orders Current Conditions 65.0 60.9 62.5 1.6 2.6% Future Expectations 76.8 67.8 67.9 0.1 0.1% Export Orders Current Conditions 58.6 58.3 62.9 4.6 7.9% Future Expectations 69.0 62.1 67.2 5.1 8.2% Productive Capacity Current Conditions 60.4 56.9 57.2 0.3 0.5% Future Expectations 68.8 62.6 63.9 1.3 2.1% Order Backlogs Current Conditions 49.8 43.3 41.8 -1.5 -3.5% Future Expectations 46.8 45.3 43.6 -1.7 -3.8% Employment Current Conditions 52.9 50.1 51.6 1.5 3.0% Future Expectations 53.0 50.9 54.7 3.8 7.5% Inventories Current Conditions 55.9 51.0 61.4 10.4 20.4% Future Expectations 47.4 52.9 57.3 4.4 8.3% Input Prices Current Conditions 73.5 69.4 69.6 0.2 0.3% Future Expectations 69.7 68.1 68.6 0.5 0.7% Prices Received Current Conditions 61.8 57.9 56.3 -1.6 -2.8% Future Expectations 65.9 59.0 59.6 0.6 1.0% Financial Position Current Conditions 66.0 64.6 68.2 3.6 5.6% Future Expectations 78.2 72.2 74.9 2.7 3.7% Interest Rates Paid Current Conditions 67.3 67.6 61.8 -5.8 -8.6% Future Expectations 67.1 64.1 57.1 -7.0 -10.9% Effect of Rupee Exchange Rate Current Conditions 38.8 37.9 43.1 5.2 13.7% Future Expectations 44.1 38.9 44.8 5.9 15.2% Supplier Delivery Time Current Conditions 56.0 53.3 54.4 1.1 2.1% Future Expectations 52.2 54.6 54.7 0.1 0.2% Availability of Credit Current Conditions 58.4 53.2 57.1 3.9 7.3% Future Expectations 61.7 58.2 56.1 -2.1 -3.6%
  38. 38. MNI India Business Report - April 201438 Methodology 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? A diffusion indicator is 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. Over 200 companies are surveyed each month.
  39. 39. Insight and data for better decisions Discovering trends in Emerging Markets MNI‘s Emerging Markets Indicators explore attitudes, perspectives and confidence in Russia, India and China. Our data and monthly reports present an advance picture of the economic landscape as perceived by businesses and consumers. Our indicators allow investors, economists, analysts, and companies to identify economic trends and make informed investment and business decisions. Our data moves markets. www.mni-indicators.com
  40. 40. Published by MNI Indicators | Deutsche Börse Group Westferry House 11 Westferry Circus London E14 4HE www.mni-indicators.com Copyright© 2014 MNI Indicators | Deutsche Börse Group. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved.

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