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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 indicators.
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.”
