SIDBI releases first edition of MSME Outlook Survey
05th
February, 2025: SIDBI
launched “MSME Outlook Survey”-
a quarterly report on MSME Business Sentiment. On the basis of a survey of
MSMEs spread across Manufacturing, Services and Trading sectors, the report
attempts to bridge the data gap in the MSME sector by developing a lead + lag
indicator, in the form of MSME-Business Expectations Index (M-BEI) and
MSME-Business Conditions Index (M-BCI), that provide a steady flow of insights
into the current performance of MSMEs in India and their perception.
The
Survey is in-depth and captures MSMEs’ assessment of current business situation
and future expectations on 22 parameters ranging from business performance to
availability of skilled labour, employment generation, capacity addition,
financial access, cost of funds and ease of doing business. This pan-India
survey with a sample size of about 1200 MSMEs captures sentiments of MSMEs
across regions and industries.
The
Survey generates two indices, (M-BCI) and (M-BEI), which are essentially
weighted averages of the responses from MSMEs on six specific performance
parameters – sales growth, profitability, availability of skilled labour,
access to finance, cost of finance and overall business situation. While the
M-BCI is an indicator of the sentiment of the MSMEs during the survey period,
i.e. October-December 2024, M-BEI indicates the future sentiments of the MSMEs
based on expectations on the above parameters captured for the next four
quarters. The M-BCI and M-BEI are diffusion indices that ranges from 0 to 100,
where scores above 50 indicate positive sentiment and scores below 50 suggest
negative sentiment.
The key
findings of the survey are mentioned below:
1.
MSMEs
across manufacturing, trading and services (other than trading) sectors noted
an uptick in their business performance in the period October-December 2024.
The MSMEs engaged in manufacturing activity were most positive with the M-BCI
for the Manufacturing sector exhibiting the strongest business confidence
reading of 60.33, closely followed by the Services M-BCI at 59.67.
2.
M-BEI
projects consistent optimism for the next four quarters, with indices above 60
and manufacturing even above 70, reflecting bullish sentiment on parameters
like sales, profitability, and expectations of improved availability of skilled
labour, access to finance and overall business situation.
3.
Majority
of MSMEs are optimistic on sales growth buoyed by positive sentiment on order
books, production and rise in selling price for the next quarter and a year
ahead as well.
4.
Respondents
in the manufacturing sector are expecting rise in input costs. However, with
higher production quantity and increase in average selling price, about half of
them expecting an increase in the profit margin a year ahead.
5.
About a
sixth of the respondents in all sectors were not happy with the labour productivity
and availability of skilled labour during the survey period. However, they
expect the same to improve in the year ahead.
6.
Employment
scenario was broadly steady in the Oct-Dec 2024 quarter with majority of
respondents’ employee strength remaining unchanged. The expectations on the
future, however, are bullish with 30-40% planning to increase their workforce
in the next quarter. The optimism is more pronounced in the manufacturing
sector and relatively sedate in trading.
7.
The share
of responses in favour of adoption of digital modes for selling & marketing
rising steadily going forward.
8.
The share
of positive responses towards willingness to invest in environmental protection
measures and adopting new technologies is rising going forward.
9.
Survey
participants from all sectors are optimistic about access to infrastructure,
supply of electricity and reduced time and efforts to obtain permits and
clearances. More than 70% of the participants in all sectors were satisfied with the
time and effort taken to obtain permits & clearances and supply of
electricity, while about 15% reported improvement in these parameters in the
Oct-Dec 2024 quarter. The share of respondents expecting improvement on these
parameters a year ahead from now also rises across the sectors.
Shri
Manoj Mittal, Chairman and Managing Director, SIDBI while releasing the report
said “MSMEs serve as the crucial foundation of the Indian economy and a
powerful instrument for bringing about socioeconomic change. SIDBI has always
acknowledged the incredible contribution of MSMEs in India’s growth story and
is committed to the development of the sector through both financial and
non-financial initiatives. The importance given to this sector by GOI is also
evident from the fact that it has been identified as one of the four growth
engines of the economy during the recent union budget. I firmly believe that
the continuous flow of quality information on MSMEs through this survey will
help all stakeholders in evaluating the current business climate and fine-tune
their respective approaches.”
The
report is available at https://www.sidbi.in/uploads/msme_outlook_survey.pdf
About
Small Industries Development Bank of India (SIDBI):
Since its
formation in 1990, SIDBI has been touching the lives of citizens across various
strata of society through its integrated, innovative and inclusive approach.
SIDBI has directly or indirectly impacted the lives of Micro, Small and Medium
Enterprises (MSMEs) through various credit and developmental measures whether
they are traditional, domestic small entrepreneurs, bottom-of-the-pyramid
entrepreneurs, or high-end knowledge-based entrepreneurs.
For more
information, please visit: https://www.sidbi.in/
