Communiqué November 2009 | 1 - CII

economysurveyBusiness Confidence Up: CII IndexThe CII-Business Confidence Index for October-March 2009-10improved by 7.4 points to 66.1, as compared to a 2.4 pointincrease during the first half of 2009-10CII Business Confidence IndexThe CII Business Confidence Index (CII-BCI) for October-March 2009-10 surged by a robust 7.4 points to 66.1as compared to a 2.4 point increase during the first halfof 2009-10, reflecting a boost in business confidencecompared to the previous six months. The CII-BCIis constructed as a weighted average of the CurrentSituation Index (CSI) and the Expectations Index (EI).The Business Confidence Index advanced on the backof improvement in both current situation index andexpectation index, though the latter has shown betterprogress. However, uncertain global economic outlookand slackening consumer demand continue to affectbusiness confidence.Data from RespondentsH I G H L I G H T S54% expect GDP growth rate for 2009-10 in therange of 6% to 7%.82% expect inflation to be below 5% in2009-10.80% expect economic turnaround and recoverytowards normal growth towards the end of2009-10 and beyond.52% foresee increase in spending on capacityexpansion in H2 of 2009-10.The Current Situation IndexThe Current Situation Index (CSI) compares the currentbusiness conditions in relation to the previous six months.CSI gained 5.9 points as compared to the previousperiod and 3.4 points compared to the correspondingperiod last year. Within CSI, the index for the overalleconomy gained 7.8 points, adding to the evidence thatthe economy is reviving faster than expected.Business Confidence IndexIndexApr-Sept2008-09Oct-Mar2008-09Apr-Sept2009-10Oct-Mar2009-101. Business Confidence Index 61.0 56.3 58.7 66.12. Current Situation Index 60.3 55.9 53.4 59.3(a) Overall Economy 57.1 48.3 48.6 56.4(b) Own Activity Sector 58.4 52.3 50.1 57.5(c) Own Company 62.7 60.9 57.2 61.63. Expectation Index 61.4 56.5 61.4 69.5(a) Overall Economy 57.5 47.6 56.8 67.4(b) Own Activity Sector 59.0 53.8 58.6 68.0(c) Own Company 64.3 61.4 64.7 71.1Expectation IndexThe expectation Index reflects the perceptions of Indianindustry with regard to the performance of their company,their sector and the economy in the second half of2009-10. The Expectation Index gained 8.1 points over80% expect increased sales during October-March 2009-10 in comparison to April-September2009-10.70% expect an increase in production in thesecond half of 2009-10.78% expect increase in orders during October-March 2009-10.87% feel that cost of credit will not fall duringthe second half of 2009-10.96% expect employment to either increase orremain constant during the next six months.57% foresee increase in Input prices over thenext six months.74% feel that availability of credit has notincreased in the first half of 2009-10 in spiteof RBI’s effort, 62% expect no increase in thecoming six months.90% of exporter respondents do not expectexports to decline during October- March2009-10.Global economic Instability and slackeningconsumer demand remain the top concerns.28 | November 2009 Communiqué