The business outlook for the northern region shows signs of moderate recovery for the quarter April-June 2012,as per a quarterly survey conducted by the Confederation of Indian Industry (CII) Northern Region. The survey asked respondents about their key concerns on 10 pre-defined concern areas.
High interest rates and raw material cost have retained the top two spots in the current survey,similar to the previous one. This reflects high interest rates and commodity prices in the international markets due to geo-political reasons.
Stagnancy in reforms is the third most important concern while currency risks and inadequate skilled labour come fourth and fifth respectively. The CII Northern Region Business Outlook Survey – conducted from end-March to 16 April – is based on responses from 54 organisations across the eight northern states of Delhi,Haryana,HP,J&K,Punjab,Rajasthan,UP and Uttarakhand) and the Union Territory of Chandigarh.
Sectorwise,63 per cent of the respondents were from manufacturing,35 per cent from services and 2 per cent from the primary sector. Based on the size of the firms,7 per cent were micro firms,26 per cent were small,19 per cent medium and 48 per cent large ones. Eighty-one per cent of the respondents expected GDP growth to be less than 8 per cent for the current financial year (2012-13),similar to the previous financial year (2011-12). Thirty-one per cent expected less than 7 per cent growth in 2012-13 against 48 per cent in 2011-12 (which was in sync with the advance estimate of 6.9 per cent GDP growth of the Indian economy in 2011-12).
On the inflation front,expectations of easing down were low,with 34 per cent of the respondents expecting inflation to surpass the 9 per cent mark this year against 29 per cent in 2011-12. Thus,expectations of high inflation continue to persist in the economy,a worrying trend. However,the outlook on business conditions for the current quarter (April-June) shows signs of moderate recovery. The expectation for the current quarter is much better for the Indian economy,the respective sectors and own companies,with a greater percentage of respondents rating the quarter as better compared to the previous quarter (January-March).
On the jobs front too expectations were positive,as 46 per cent of the respondents expected an increase in employment compared to just 31 per cent earlier. Eighty per cent expect an increase in electricity and fuel cost against 65 per cent in the previous quarter. Sixty-nine per cent of the respondents expect an increase in cost of wages and salaries compared to 63 per cent in January-March.