Marginal Improvement in Business Confidence in Q4 2014

D&B Business Optimism Index up by 2.0% in Q4 2014

Highlights

·         Composite Business Optimism Index stands at 137.6 during Q4 2014, an increase of 2.0%  as compared to Q4 2013

·         Resultant Optimism for Volume of Sales stands at 77% - an increase of 13 percentage points as compared to Q4 2013

·         Resultant Optimism for Net Profits stands at a 3-quarter high of 66% - an increase of 9 percentage points as compared to Q4 2013

·         Resultant Optimism for New Orders stands at 73% - an increase of 13 percentage points as compared to Q4 2013.

The Dun & Bradstreet Composite Business Optimism Index stands at 137.6 during Q4 2014, an increase of 2.0% as compared to Q4 2013. Based on the responses received, it was observed that four out of the six optimism indices – namely, Volume of Sales, New Orders, Net Profits and Employee Levels have registered an increase as compared to Q4 2013.

D&B's Composite Business Optimism Index:  Q4’02 – Q4’ 14

“Underlying business sentiment continues to be resilient with the D&B Composite Business Optimism Index during Q4 2014 recording an increase of 2% over the year-ago quarter. However, on a q-o-q basis the index has witnessed a marginal decline, stemming from a steep fall in optimism with regard to selling prices. Price competition in the face of subdued demand is deterring firms from raising prices even as input costs remain high. That said, the buoyant sentiment regarding volume of sales and new orders augurs well for future growth”,said Kaushal Sampat, President & Managing Director - India, Dun & Bradstreet. “Going forward, improvement in business confidence  is contingent on addressing structural issues in areas such as coal supplies and agriculture, simplification of business and taxation rules and resumption of various stalled projects” he added.

Around 82% of the respondents expect volume of sales to increase in Q4 2014. While 5% anticipate the sales volume to decline, the remaining 13% expect volume of sales to remain unchanged in Q4 2014. The resultant Optimism for Volume of Sales stands at 77%, an increase of 13 percentage points when compared to Q4 2013.

Around 73% of the respondents expect an increase in net profits during Q4 2014, while 20% expect no change in net profits. About 7% of the respondents expect net profits to decline. The resultant Optimism for Net profits stands at a 3-quarter high of 66%, an increase of 9 percentage points over Q4 2013 and 2 percentage points over Q3 2014.

Around 34% of the respondents expect the selling price of their products to increase during Q4 2014. While 59% anticipate no change, the remaining 7% of the respondents expect a decline in selling prices. The resultant Optimism for Selling Prices stands at 27%, a decrease of 12 percentage points over Q4 2013.

Around 76% of the respondents expect their order book position to improve during Q4 2014. While 21% anticipate no change in the new orders received, the remaining 3% expect new orders to decline. The resultant Optimism for New Orders stands at 73%, an increase of 13 percentage points over Q4 2013.

 Around 38% of the respondents expect their level of stock to increase during Q4 2014, while 48% expect their level of stock to remain unchanged. The remaining 14% expect inventory levels to decline in Q4 2014. The resultant Optimism for Inventory Levels stands at 24%, the same level as Q4 2013 and a decrease of 3 percentage points over Q3 2014.

 Around 59% of the respondents anticipate no change in the size of their workforce employed during Q4 2014. While 36% intend to increase the number of employees, the remaining 5% expect their workforce size to decline. The resultant Optimism for Employees stands at 31%, an increase of 4 percentage points over Q4 2013 and a decrease of 3 percentage points over Q3 2014.

D&B Business Optimism Index Full Report

 About the D&B Business Optimism Index

 The D&B Business Optimism Index is widely recognised as an indicator, which measures the pulse of the business community and serves as a reliable benchmark for investors. The index is arrived at on the basis of a quarterly survey of business expectations.

The survey is conducted on a sample of companies that are selected randomly from D&B’s commercial credit file. The sample selected is a microcosmic representation of the country’s business community and includes companies from several sectors including basic goods, capital goods, intermediate goods, consumer durables, consumer non-durables and service sectors. Respondents to the survey are asked six standard questions regarding whether specified parameters viz., net sales, net profits, selling prices, new orders, inventories and employee levels, will register an increase, decline or show no change in the ensuing quarter as compared to the corresponding quarter of the previous year. The indices are then calculated by subtracting the percentage of respondents expecting decreases from those expecting increases.

 For calculating the Composite Business Optimism Index, each of the six parameters is assigned a weight. The positive responses for every parameter for the period under review are expressed as a proportion of positive responses in the base period (Q2 1999). The parameter weights are then applied to these ratios and the results aggregated to arrive at the Composite Business Optimism Index.

 About Dun & Bradstreet (D&B):

Dun & Bradstreet (NYSE:DNB), the world’s leading source of global business information, knowledge and insight, has been enabling companies to Decide with Confidence® for 172 years. D&B’s global commercial database contains more than 230 million business records. The database is enhanced by D&B’s proprietary DUNSRight® Quality Process, which transforms the enormous amount of data collected daily into decision-ready insight. Through the D&B Worldwide Network – an unrivaled alliance of D&B and leading business information providers around the world – customers gain access to the world’s largest and highest quality global commercial business information database.

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