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MNI India Business Report November 2013
Insight and data for better decisions
MNI India Business Report - November 20132
About MNI Indicators Insight and data for better decisions
MNI Indicators offers unique macro-economic data and insight to businesses and the investment community. We produce data and intelligence that is unbiased, pertinent and responsive. Our data moves markets.
MNI Indicators specialises in business and consumer focused macro-economic reports that give our customers the ability to make timely and relevant decisions. We strive to provide up-to-date information on business and consumer confidence on the economy.
MNI Indicators publishes data on a monthly basis. Our indicators are based on a unique and proprietary methodology and are designed to present an advance picture of the economic landscape as perceived by businesses and consumers every month.
Our monthly reports explore attitudes, perspectives and confidence across different countries and regions. They deliver in-depth analysis, highlight changing patterns and how these can affect potential developments in business and consumer activities.
MNI Indicators is part of MNI, a leading provider of news and intelligence. MNI is a wholly owned subsidiary of Deutsche Börse Group, one of the largest worldwide exchange organisations.
Written and researched byPhilip Uglow, Chief EconomistShaily Mittal, Economist
MNI Indicators | Deutsche Börse Group Westferry House11 Westferry CircusLondon E14 4HETel: +44 (0)20 7862 7444Email: [email protected]
[email protected]@MNIIndicators
Copyright© 2013 MNI Indicators | Deutsche Börse Group. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved.
MNI India Business Report - November 2013 3
MNI India Business Report - November 2013Contents
4 Editorial
6 Executive Summary
10 Economic Landscape
14 Indicators
15 MNI India Business Indicator
16 Production
17 New Orders
18 Export Orders
19 Productive Capacity
21 Order Backlogs
22 Employment
23 Inventories
24 Input Prices
25 Prices Received
26 Financial Position
27 Interest Rates Paid
29 Effect of Rupee Exchange Rate
30 Supplier Delivery Times
31 Availability of Credit
32 What the Panel Said
34 Data Tables
38 Methodology
Spitzzeile Titel4
India has witnessed a lot of bad news this year. GDP growth slowed to the weakest in 10 years, manufacturing hit the rocks, the rupee came under intense pressure and inflation accelerated.
Seeing the Potential
MNI India Business Report - November 2013 5
India has witnessed a lot of bad news this year. GDP growth slowed to the weakest for 10 years, manufacturing hit the rocks, the rupee came under intense pressure and inflation accelerated.
And yet in November the Sensex hit a high of 21293.88. Not bad considering just a few months previously there were real concerns that capital flight threatened the stability of the economy. Global investors ran for the exits as expectations grew that the US Federal Reserve would start to scale back its Quantitative Easing programme and begin to taper the scale of its bond purchases.
Having hit a low of 17905.95 in August, the Sensex is now up 8.8% since the start of the year supported by foreign investment. The recovery really took off when the Fed backed away from an early withdrawal of monetary stimulus with investors feeling more secure that the easy money would flow for longer.
Companies that export have also benefited from the slide in the rupee this year which has made their exports far cheaper. Companies such as TCS and Wipro are up 50% and 34% respectively since the start of the year, favoured by international investors for their ability to take advantage of the weak currency and the upturn in global growth.
The Sensex has also benefited from other factors. There is a growing feeling that the worst could be over and that the economy has bottomed. Our own business survey data supports this view, although there is a long way to go. Investors are also beginning to price in a 2014 election victory for Narendra Modi who is seen as good for the stock market.
In part the Sensex is also playing catch up, having barely moved with inflation in recent years. Investors don’t see a huge amount of downside.
Further support for the market and the wider economy comes from the recent international deal to bring Iran in from the cold. India is seen as one of the biggest beneficiaries from the raised sanctions. Overall, the deal is seen as likely to put downward
pressure on oil prices and India will be able to purchase more oil with rupees which would also help the currency. There are clearly risks to equity markets held up by foreign investment, with many seeing the increase as fragile and vulnerable to setbacks – not least the eventual US tapering. Even so, the latest Ernst and Young bi-annual Capital Confidence Barometer put India as the most attractive investment destination, snatching top spot from China who have now been demoted to second place, just ahead of Brazil in third. Through all the negatives of this year, investors see a lot of potential.
Philip UglowChief EconomistMNI Indicators
Spitzzeile Titel6
The MNI India Business Sentiment Indicator increased by 8.0% to 64.6 in November compared with 59.8 in October, marking a series high since the survey started in November 2012.
Executive Summary
MNI India Business Report - November 2013 7
The MNI India Business Sentiment Indicator increased by 8.0% to 64.6 in November compared with 59.8 in October, marking a series high since the survey started in November 2012.
In November, business conditions improved considerably among manufacturing sector companies compared with October, while they remained broadly stable for construction companies and declined slightly among service sector firms.
Official economic data has remained lacklustre with manufacturing output weak, while inflation has remained uncomfortably high.
Expectations for business conditions in three months’ time remained steady following last month’s fall which was likely due to a seasonal effect as the festival period came to an end. The indicator stood at 69.5 in November compared with 68.8 in October.
Thirteen out of the 15 current conditions indicators included in the report increased in November. Employment was the only indicator to decline and Inventories remained unchanged compared with October. For Business Expectations in the next three months, 13 indicators rose compared with the previous month. Only New Orders and Employment posted falls.
After falling sharply in October, Production recovered nearly all its lost ground in November, to stand at 65.3, close to the series high of 67.3 seen in September.
The New Orders Indicator increased 5.7% on the month to 62.9 in November from 59.5 in October, below the three month average of 63.8. Export Orders increased to 58.8 in November after easing in October to 55.6, a rise of 5.8% on the month.
The Productive Capacity Indicator has trended upwards after a sharp contraction in April. Following a seasonal blip in October, the indicator increased by 5.5% to 61.3 in November from 58.1 in the previous month.
Order Backlogs fell into contraction between June and August before pushing back above the 50 mark in September. They slipped below 50 again in October and remained in contraction in November as well.
The Employment Indicator fell for the third consecutive month in November, the first time below 50 and a new series low.
Most companies surveyed reported that high inflation was a serious problem and rising input prices added to their costs. The Input Price indicator increased sharply to 73.0 in November from 63.3 in October, a 15.3% hike on the month. The Prices Received Indicator increased to 60.8 in November from 54.9 in October, a jump of 10.7% on the month.
The Effect of the Rupee Exchange Rate Indicator rose significantly after falling for four consecutive months as far fewer firms reported the exchange rate was hurting their business.
The Financial Position Indicator rose sharply in November to 69.9 from the October’s 58.6, a rise of 19.3% on the month.
MNI India Business Report - November 20138
Overview
Sep -13 Oct -13 Nov -13Highest
Since Lowest
Since3-Month Average
Monthly Change
Monthly % Change
MNI India Business Indicator
Current Conditions 59.4 59.8 64.6 series high - 61.3 4.8 8.0%
Future Expectations 77.1 68.8 69.5 Sep-13 - 71.8 0.7 1.0%
Production
Current Conditions 67.3 57.5 65.3 Sep-13 - 63.4 7.8 13.6%
Future Expectations 76.8 64.8 68.8 Sep-13 - 70.1 4.0 6.2%
New Orders
Current Conditions 69.1 59.5 62.9 Sep-13 - 63.8 3.4 5.7%
Future Expectations 78.5 69.5 68.5 - Jun-13 72.2 -1.0 -1.4%
Export Orders
Current Conditions 63.2 55.6 58.8 Sep-13 - 59.2 3.2 5.8%
Future Expectations 75.5 57.7 60.8 Sep-13 - 64.7 3.1 5.4%
Productive Capacity
Current Conditions 64.0 58.1 61.3 Sep-13 - 61.1 3.2 5.5%
Future Expectations 70.3 65.1 65.2 Sep-13 - 66.9 0.1 0.2%
Order Backlogs
Current Conditions 52.9 42.9 45.3 Sep-13 - 47.0 2.4 5.6%
Future Expectations 57.5 43.4 48.8 Sep-13 - 49.9 5.4 12.4%
Employment
Current Conditions 53.3 51.3 48.9 - series low 51.2 -2.4 -4.7%
Future Expectations 53.4 51.1 49.5 - series low 51.3 -1.6 -3.1%
Inventories
Current Conditions 60.1 50.0 50.0 - - 53.4 0.0 0.0%
Future Expectations 53.7 50.7 53.3 Sep-13 - 52.6 2.6 5.1%
Input Prices
Current Conditions 74.1 63.3 73.0 Sep-13 - 70.1 9.7 15.3%
Future Expectations 72.9 65.3 72.5 Sep-13 - 70.2 7.2 11.0%
Prices Received
Current Conditions 61.8 54.9 60.8 Sep-13 - 59.2 5.9 10.7%
Future Expectations 67.0 57.3 63.8 Sep-13 - 62.7 6.5 11.3%
Financial Position
Current Conditions 72.3 58.6 69.9 Sep-13 - 66.9 11.3 19.3%
Future Expectations 83.3 71.1 74.2 Sep-13 - 76.2 3.1 4.4%
Interest Rates Paid
Current Conditions 68.4 60.3 73.2 series high - 67.3 12.9 21.4%
Future Expectations 65.2 65.9 69.6 Aug-13 - 66.9 3.7 5.6%
Effect of Rupee Exchange
Current Conditions 31.6 30.9 43.4 Jul-13 - 35.3 12.5 40.5%
Future Expectations 32.7 30.1 43.5 Aug-13 - 35.4 13.4 44.5%
Supplier Delivery Times
Current Conditions 58.4 52.7 52.9 Sep-13 - 54.7 0.2 0.4%
Future Expectations 56.1 54.6 55.0 Sep-13 - 55.2 0.4 0.7%
Availability of Credit
Current Conditions 61.9 51.3 55.7 Sep-13 - 56.3 4.4 8.6%
Future Expectations 65.3 56.6 59.2 Sep-13 - 60.4 2.6 4.6%
w
Industrial production rose 2.0% on the year in September.
The rise was driven by a strong growth in infrastructure output which could give a boostto construction output ahead.
Spitzzeile Titel10
In response to the continued rise in inflation, the Reserve Bank of India hiked the policy rate for the second consecutive month to 7.75% from 7.5%.
Economic Landscape
MNI India Business Report - November 2013 11
In response to the continued rise in inflation, the Reserve Bank of India hiked the policy rate for the second consecutive month at the end of October to 7.75% from 7.5%. India’s headline rate of inflation, measured by the wholesale price index, increased to 7.0% in October from 6.5% in September, further above the government’s end-year target of 5.0%. Consumer price inflation hit double digit figures. RBI Governor Raghuram Rajan said he didn’t want to see the RBI labeled as “nutters” on inflation but added that bringing down inflation was the best medicine for sustainable growth.
Industrial production picked up in September, although remained weak, while manufacturing output posted a meagre rise on the year. Data from the external sector has been mixed, although the recent rise in exports is a positive.
Lower forecast for India GDPThe Reserve Bank of India lowered its growth forecast for the 2013-14 fiscal year to 5.0% from 5.5% earlier in the year given weak consumption and investment demand. This was in line with the projections from both the World Bank and IMF who lowered their forecasts for India recently. The central bank‘s decision to increase the policy rate to 7.75% from 7.5% on October 29 to curb inflation will also hamper growth.
Economic growth in India slowed to 4.4% in April-June 2013 compared with the same period a year earlier, the lowest in four years. Output was hit by a 1.2% contraction in manufacturing, compared with a decline of 1.0% in April-June last year, while mining & quarrying fell by 2.8% compared with a small increase of 0.4% in the same period a year earlier. Services, which accounts for the highest proportion of GDP, grew at 6.6% on the year, compared with growth of 7.6% in the same period last year.
All eyes are on the July to September GDP data due for release on November 29 with analysts expecting to see growth broadly unchanged at around 4.5% on the year. RBI Governor Rajan has said he expects growth in the second half of the year accelerate on
the back of increased export growth and a boost to agriculture from a good monsoon season.
Economic Growth
0%
2%
4%
6%
8%
10%
12%
Q1
2009
Q3
2009
Q1
2010
Q3
2010
Q1
2011
Q3
2011
Q1
2012
Q3
2012
Q1
2013
GDP y/y %
Source: Central Statistical Organisation, India
Industrial production rises but still weak Industrial production rose 2.0% on the year in September, having declined in August by a revised 0.4%. From January-October this year, industrial production was up just 1.0% compared with the same period a year earlier. The September outturn was the third consecutive month of positive year-on-year growth, averaging 1.7% in three months to September. Still, growth remained weak and given the low base in September 2012 it was even less impressive.
The rise on the year was driven by strong growth in infrastructure output, which has a weight of 37.9% in industrial production, which could give a boost to construction output ahead. Output of India‘s eight infrastructure industries (coal, crude oil, fertiliser, electricity, cement, natural gas, refinery products, steel) rose 8.0% from a year earlier, following a growth of 3.7% in August.
Manufacturing output grew marginally by 0.6% compared with a year earlier, up from a decline of 0.1% in August. Mining expanded by 3.3%, after remaining in contraction for the last 10 months.
MNI India Business Report - November 201312
billion in September. Gold and silver imports increased to $1.4 billion in October on festival season demand from $800 million a month earlier but down from $6.8 billion last year.
Measures such as increased taxation on gold imports to 15.0% in October from 2.0% previously, and allowing only 80% of gold imports to be used for domestic purposes, seems to have been effective in curbing imports.
Less timely data on the current account, showed the deficit reached $21.8 billion in the three months to June, up from $18.1 billion in the previous quarter and $16.9 billion in the same period a year earlier. As a proportion of GDP the deficit widened to 4.9% from 3.6% in the previous quarter, and 4.0% a year ago.
Capital goods output contracted 6.8% on the year compared with a decline of 2.0% in August. Consumer durables, indicative of consumer demand, were also down 10.8% on the month, the tenth consecutive monthly decline.
The latest RBI Industrial Outlook survey showed a further weakening in business conditions, with the Business Expectation Index falling to 97.3 in July-September from 101.2 in April-June, below the 100 threshold which separates expansion from contraction. Expectations for the next quarter also declined to 109.9 from 112.7 previously. New Orders were down on the month while production was broadly unchanged.
Trade deficit jumps in OctoberIndia’s trade deficit widened to $10.5 billion in October from a two and a half year low of $6.7 billion in September. This was almost half the level seen in October last year when the trade deficit was $20.2 billion. Imports stood at $37.8 billion compared with $34.4 billion in September, 14.5% down from a year earlier. Exports rose for the fourth straight month, up 13.5% from a year earlier to $27.3 billion, little changed from September’s $27.7 billion outturn. Crude oil imports rose to $15.2 billion from $13.2
Trade Deficit
0
5,000
10,000
15,000
20,000
25,000
Jan-
12
Mar
-12
May
-12
Jul-1
2
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul -1
3
Sep-
13
Trade Deficit (USD)
Source: Indian Ministry of Commerce and Industry
Industrial Production
-10%
-5%
0%
5%
10%
15%
20%
25%
50
100
150
200
250
2007
2008
2009
2010
2011
2012
2013
Industrial Production y/y %
Industrial Production
Source: Central Statistical Organisation, India
The finance ministry expects to reduce the current account deficit to 3.7% of GDP for the current fiscal year and has said that it will be fully financed without having to draw on its reserves. The current account deficit is expected to moderate in the second broadly in line with the narrowing trade deficit.
Inflation accelerates furtherIndia’s headline rate of inflation, measured by the
MNI India Business Report - November 2013 13
wholesale price index, increased to 7.0% in October from 6.5% in September, further above the government’s end-year target of 5.0%. Food price inflation remained broadly unchanged at 18.2% in October compared with 18.4% in September. Onion prices, a cooking essential, soared by 278% on the year, down from a rise of 323% in September. Fuel prices rose by 10.3% on the year compared with 10.1% in the previous month. Manufactured products inflation rose to 2.5%, up from 2.0% reported in October.
Consumer price inflation accelerated to 10.1% in October from 9.8% in September, of which food price inflation, having a weight of more than 45.7% in the index, rose to 12.6% compared with 11.4% in September. Vegetable prices remained high in October but are expected to decline due to a bumper harvest.
The quarterly Inflation Expectations survey of households conducted by the RBI for the July- September quarter revealed that 77% of respondents, up from 65% in the previous quarter expected double digit inflation to continue for the next three months. Eighty percent, up from 73%, thought that inflation would be in double digits one year ahead.
The RBI raised the policy interest rate to 7.75% at the end of October in a bid to break the spiral of rising price pressures in order to curb the erosion of savings and strengthen the foundations of growth.
Rupee stabilises and reserves increaseThe level of India’s foreign exchange reserves rose by $6.7 billion to $283 billion in October, the sharpest rise since 2011 helping to support the rupee. Moreover, the RBI’s decision on November 22 to extend the deadline for banks to swap dollars at discounted rates has lent further support.
The Rupee rallied to 62.44 in trading on November 25 having hit a low of 68.85 in late August.
The Rupee fell sharply earlier this year after US Federal Reserve Chairman Ben Bernanke warned in May that it could start tapering its bond purchases
this year. India was hit harder than other emerging markets due to its sizeable current account deficit and also a growing inability of the government to move forward with reforms to drive investment – all of which have led to significant capital outflows. The rupee fell around 24% since May to reach an all time low against the US dollar at the end of August.
Exchange Rate
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
48
50
52
54
56
58
60
62
64
66
Jan-
13
Feb-
13
Mar
-13
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
INR/USD y/y %
INR/USD (RHS)
Source: Reserve Bank of India
Household spending remains weakConsumer Spending in India decreased to Rs. 8507.67 billion in the second quarter from Rs.8668.54 billion in the first quarter of 2013 and was up only 1.6% from the same period last year, the slowest rise since 2005.
Car sales declined by almost 4.0% in October to 163,199 units compared with the same period a year ago, according to data released by the Society of Indian Automobile Manufacturers. From January to October, car sales were down 10.6% compared with the same period a year earlier. The industry body said that the fiscal year ending March 2014 would see car sales in India fall, marking a second straight year of decline, as high interest rates and a slowing economy forces consumers to delay purchases. They had earlier estimated in April that car sales would grow by 3-5% this year.
Spitzzeile Titel14
In November, business conditions improved considerably among manufacturing sector companies compared with October, while it remained broadly stable for construction firms and declined slightly for those in the service sector.
Indicators
MNI India Business Report - November 2013 15
MNI India Business Indicator
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions 56.8 60.6 51.8 64.0 59.4 59.8 64.6
Future Expectations - 60.6 67.6 75.5 77.1 68.8 69.5
The MNI India Business Sentiment Indicator accelerated by 8.0% to 64.6 in November compared with 59.8 in October, the highest since the survey started in November 2012.
In November, business conditions improved considerably among manufacturing sector companies compared with October, while it remained broadly stable for construction firms and declined slightly for those in the service sector.
The Business Indicator has trended higher from April onwards when it fell to a low of 47.5, below the breakeven 50 level for the only time since the series began in November 2012. Expectations also increased sharply since April but fell strongly in October and recovered slightly in November.
Expectations for business in three months’ time remained steady following last month’s fall which was likely due to a seasonal effect as the festival season came to an end. The indicator stood at 69.5 in November compared with 68.8 in October. Manufacturing sector companies were the most optimistic for the future, while construction and service companies’ expectations fell compared with the previous month. The Expectations Indicator for all three sectors, though, remained well above the breakeven level.
Thirteen out of the 15 current conditions indicators included in the report increased in November. Employment was the only indicator to decline and Inventories remained unchanged compared with October. For Business Expectations in the next three
64.6MNI India Business Indicator Business Confidence Rises
40
50
60
70
80
Nov
-12
Dec
-12
Jan-
13
Feb-
13
Mar
- 13
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
Nov
-13
MNI India Business Indicator
Current Conditions
Future Expectations
“January to March is the best period for our business, so the coming months will be great to our business.” Media Company
months, 13 indicators rose compared with the previous month, with only New Orders and Employment declining.
MNI India Business Report - November 201316
After falling sharply in October, Production recovered nearly all its lost ground in November, to stand close to the series high.
The Production Indicator increased to 65.3 in November, following a decline of 14.6% in October to 57.5. Production has followed a V-curve from November 2012 when the survey started, averaging 62.1 in the final two months of 2012, falling to 41.0 in April 2013 and rising sharply since then to an average of 61.4 for the past two months.
The latest data on industrial production showed an increase of 2.0% on the year in September, coincident with the MNI Production Indicator hitting a series high. Manufacturing output grew marginally by 0.6% compared with a year earlier, up from a decline of 0.1% in August.
The rise in the Production Indicator in November was led by the manufacturing and construction sectors. Service sector companies experienced a fall in business activity after rising to a series high in October.
Future expectations for Production were also bright in November, with firms more optimistic about their production levels in three months’ time. Expectations increased to 68.8, up 6.2% from 64.8 in October.
Production Recovers from October’s Marked Decline
Production
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions 58.1 54.8 56.9 59.9 67.3 57.5 65.3
Future Expectations - 59.4 76.3 71.8 76.8 64.8 68.8
65.3
30
40
50
60
70
80
Nov
-12
Dec
-12
Jan-
13
Feb-
13
Mar
-13
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
Nov
-13
Production
Current Conditions
Future Expectations
Industrial Production to Catch Up
-3%
-2%
-1%
0%
1%
2%
3%
4%
30
35
40
45
50
55
60
65
70
Jan-
13
Feb-
13
Mar
-13
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
Nov
-13
Industrial Production y/y % (RHS)
MNI Production Indicator
Source: Central Statistical Organisation, India
MNI India Business Report - November 2013 17
The New Orders Indicator increased 5.7% on the month to 62.9 in November from 59.5 in October, below the three month average of 63.8.
Like most of the indicators included in this report, New Orders hit a record low in April and have subsequently been on an upward trend. The festival season hit orders in October, although they bounced back partially in November.
The New Orders Indicator for manufacturing companies increased on the month after a significant fall in October, while orders in the service and construction sectors declined. For all sectors the indicator remained well above the breakeven 50 mark.
Expectations for New Orders in three months fell for the second month in a row. The indicator dropped by 1.4% in November to 68.5 from 69.5 in October. From July to September, Indian businesses had high expectations for New Orders with the indicator standing at an average of 76.8, boosted by an expected increase in demand for goods and services for the festivals in October and November.
New Orders Expectations Fall for Second Month
New Orders
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions 43.3 58.7 61.9 64.0 69.1 59.5 62.9
Future Expectations - 58.4 76.8 75.0 78.5 69.5 68.5
62.9
30
40
50
60
70
80
90
Nov
-12
Dec
-12
Jan-
13
Feb-
13
Mar
-13
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
Nov
-13
New Orders
Current Conditions
Future Expectations
“There are no new orders with company.” Investment Services company
“Our company is looking for more production in coming months.” Telecommunications Company
MNI India Business Report - November 201318
Export Orders increased to 58.8 in November after easing in October to 55.6, a rise of 5.8% on the month. Services companies reported increased export orders while there was a fall in the indicator for the manufacturing sector.
The decline in the exchange rate has increased the competitiveness of Indian exports this year, although rising input costs have offset much of this gain for a lot of companies. The number of firms who said their export orders increased was steady in November compared with October while there was an increase in the number of companies that said their export orders remained the same.
Expectations for three months’ time increased to 60.8 in November from 57.7 in October driven by a higher proportion of services companies expecting to see an increase in their export orders in three months‘ time.
Export Orders Rise After October Fall
58.8
30
40
50
60
70
80
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
Nov
-13
Export Orders
Current Conditions
Future Expectations
Export Orders
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions - 52.9 57.7 55.0 63.2 55.6 58.8
Future Expectations - 62.6 68.9 62.6 75.5 57.7 60.8
Export Orders Trending Up
0
10
20
30
40
50
60
70
0
5
10
15
20
25
30
35
Feb-
13
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Apr-1
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Jun-
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MNI Export Orders
Exports,FOB, USD B (RHS)*
*Source: Indian Ministry of Commerce and Industry
MNI India Business Report - November 2013 19
The Productive Capacity Indicator has trended upwards after a sharp contraction in April. Following a seasonal blip in October, the indicator increased by 5.5% to 61.3 in November from 58.1 in the previous month.
Productive Capacity improved sharply for manufacturing companies offsetting the fall in the indicator for construction and service sector companies, though for all sectors, the indicator remained above the 50 mark.
Companies’ expectations about the future remained broadly stable, as Expectations for Productive Capacity in three months’ time stood at 65.2, compared with 65.1 in October.
Productive Capacity On An Upward Trend
61.3
30
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50
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70
80
Nov
-12
Jan-
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Mar
-13
May
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Jul-1
3
Sep-
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Nov
-13
Productive Capacity
Current Conditions
Future Expectations
Productive Capacity
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions 46.2 50.6 55.4 61.7 64.0 58.1 61.3
Future Expectations - 56.7 68.8 67.4 70.3 65.1 65.2
“Productive capacity of company has been increased.” Construction Company
Spitzzeile Titel20
w
The Input Price Indicator increased sharply to 73.0 in November, a 15.3% hike on the month.
Most companies reported that high inflation was a serious problem and rising input prices added to their costs.
MNI India Business Report - November 2013 21
Order Backlogs fell into contraction between June and August before pushing back above the 50 mark in September. They slipped below 50 again in October and remained in contraction in November as well.
Order Backlogs increased from 42.9 in October to 45.3 in November, a 5.6% rise on the month. The Backlogs Indicator for manufacturing companies fell significantly further into contraction, suggesting customers‘ demand for manufactured goods has eased after the festival season came to an end. For the construction sector, the indicator also slipped below the breakeven level. Order Backlogs increased above the breakeven level in November for service sector companies. Demand for goods and services during the festival period saw an increase in Production, New Orders and consequently Order Backlogs in September. In hand with the significant decline in Production and New Orders, Order Backlogs also eased in October and recovered only slightly in November.
The Future Expectations Indicator saw a much larger increase, though remained below the breakeven level at 48.8 in November, an increase of 12.4% from 43.4 in October.
Order Backlogs Remain Below 50
45.3
20
30
40
50
60
70
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
Nov
-13
Order Backlogs
Current Conditions
Future Expectations
Order Backlogs
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions - 48.5 49.4 47.0 52.9 42.9 45.3
Future Expectations - 32.8 43.6 39.4 57.5 43.4 48.8
MNI India Business Report - November 201322
The Employment Indicator fell for the third consecutive month in November, the first time below 50 and hitting a new series low.
Between October and November, the Employment Indicator fell 4.7% from 51.3 to 48.9. The majority of companies still said that the number of employees they had was “just right”, though there was a fall in the number of firms who said they didn’t have enough employees.
The decline was led by manufacturing and construction sector companies, where the indicator fell below the breakeven level. The Employment Indicator for service sector companies remained stable at 50.
Companies expected that, compared with a month ago, they will have less need to take on new employees in the next three months. The Expectations Indicator fell by 3.1% to 49.5 in November, down from 51.1 in October and the first time below the breakeven level. There was also a rise in the number of services companies who expected that there would be “too many” employees in the next three months.
Employment Falls into Contraction
48.9
44
46
48
50
52
54
56
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
Nov
-13
Employment
Current Conditions
Future Expectations
Employment
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions - 52.3 51.3 54.1 53.3 51.3 48.9
Future Expectations - 52.3 53.6 52.0 53.4 51.1 49.5
“We are targeting 20% growth next year, so we will recruit more employees.” Technology Company
MNI India Business Report - November 2013 23
The Inventory level of Finished Goods Indicator stood at 50.0, unchanged from the previous month.
The Inventory Indicator for Manufacturing remained stable at the breakeven level while that for services increased on the month, though remained in contraction.
Future expectations for the next three months increased to 53.3 in November after falling in October to 50.7. Expectations for inventories have been increasing after bottoming in June, though the growth rate has eased in recent months suggesting companies are uncertain about the future given the weak economic conditions.
Inventories At Breakeven Level
50.0
25
35
45
55
65
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
Nov
-13
Inventories
Current Conditions
Future Expectations
Inventories
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions - 48.9 55.9 51.6 60.1 50.0 50.0
Future Expectations - 31.0 35.5 52.9 53.7 50.7 53.3
MNI India Business Report - November 201324
Most companies surveyed reported that high inflation was a serious problem and rising input prices added to their costs. The Input Price indicator increased sharply to 73.0 in November from 63.3 in October, a 15.3% hike on the month.
From October to November, the Input Prices Indicator increased significantly for manufacturing companies as the percentage of companies who reported higher prices almost doubled, while the percentage of those who reported input prices were unchanged halved compared with the previous month. Input Prices for services and construction also increased, following a drop in October.
Expectations for three months’ time accelerated sharply to 72.5 in November from 65.3 in October, driven by a rise in expectations among manufacturing and service companies. The Expectations Indicator fell for construction companies, though it remained at high levels, suggesting that from October to November more construction companies expected input prices to decline in the next three months.
Input Prices A Marked Rise
73.0
45
50
55
60
65
70
75
80
85
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
Nov
-13
Input Prices
Current Conditions
Future Expectations
Input Prices
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions - 78.6 79.6 66.7 74.1 63.3 73.0
Future Expectations - 74.9 74.0 62.1 72.9 65.3 72.5
“Input prices are too high as cement & steel prices have gone up.” Real Estate Company
“Input prices have increased as compared with last month.” Hotels Company
MNI India Business Report - November 2013 25
The Prices Received Indicator increased to 60.8 in November from 54.9 in October, a jump of 10.7% on the month.
All sectors reported a rise in the Prices Received Indicator in November, with the manufacturing sector reporting the largest increase.
Prices Received have risen sharply over the past year, having stood at 44.9 in November 2012. The trend of the Prices Received Indicator has been closely matched by the official consumer price inflation data. Consumer price inflation was in double digits at the start of the year, eased in April and May and has been rising since then. Inflation rose in October to 7.0% from 6.5% in September.
The continued high level of inflation expectations and the need to break the spiral of rising prices was cited by Reserve Bank of India Governor Raghuram Rajan as the reason the central bank hiked its key interest rate by 25 basis points to 7.75% on October 29.
The Expectations for Prices Received Indicator accelerated in November by 11.3% to 63.8 from 57.3 in October, with a higher proportion of companies expecting the prices they charge for their goods and services to increase in the next three months.
Prices ReceivedDouble Digit Rise on the Month
60.8
30
40
50
60
70
80
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-1
3
Sep-
13
Nov
-13
Prices Received
Current Conditions
Future Expectations
Prices Received
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions 44.9 50.8 67.1 56.6 61.8 54.9 60.8
Future Expectations - 49.2 73.7 57.0 67.0 57.3 63.8
4%
5%
6%
7%
8%
9%
10%
30
40
50
60
70
80
Dec
-12
Feb-
13
Apr-1
3
Jun-
13
Aug-
13
Oct
-13
Prices Received and Wholesale Price Inflation
MNI Prices Received
Wholesale Price Inflation y/y % (RHS)*
*Source: Office of the Economic Advisor, India
“Prices of our services will go up in the coming period.” Real Estate and Development Company
MNI India Business Report - November 201326
The Financial Position of our panel of companies listed on the Bombay Stock Exchange has been on an upward trend and has increased sharply since the survey started in November 2012.
The Financial Position Indicator rose significantly in November to 69.9 from the October’s 58.6, a rise of 19.3% on the month and up from 54.1 in November 2012. Manufacturing companies reported the highest improvement in their financial position, followed by service sector companies.
Expectations for three months’ time also improved, though to a lesser extent. The Future Expectations Indicator increased by 4.4% from 71.1 in October to 74.2 in November.
Manufacturing companies were the most optimistic about their financial position in the next three months while a majority of service sector companies expected their financial position to be broadly stable.
Financial Position Trending Upwards
69.9
45
55
65
75
85
95
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-1
3
Sep-
13
Nov
-13
Financial Position
Current Conditions
Future Expectations
Financial Position
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions 54.1 63.0 57.6 68.1 72.3 58.6 69.9
Future Expectations - 63.1 73.3 78.0 83.3 71.1 74.2
“Currently our financial position is same compared with last month but we will expand business activities in the near future.” Recreational Service Company
MNI India Business Report - November 2013 27
The cost of credit faced by companies surged in November with the Interest Rates Paid Indicator rising to 73.2 from 60.3 in October, a record high, not surprising given the increase in official interest rates at the end of October.
More companies reported that they paid higher interest rates rather than same compared with the previous month. While in October 26% of companies surveyed reported higher credit costs, in November this increased to 51%. In contrast, the percentage of companies who reported they faced the same interest rates compared with a month earlier fell from 68.7% in October to 44.3% in November.
The Interest Rates Paid Indicator for construction and service sector companies increased by the same rate and manufacturing companies also faced an increase, although smaller.
Expectations for Interest Rates Paid in three months’ time increased in November, after remaining stable between September and October. The Expectations Indicator rose to 69.6, up 5.6% from 65.9 in October. Compared with the previous month, more manufacturing companies expected interest rates to increase in the next three months, while the indicator for service sector companies declined but remained above the breakeven 50 level.
Expectations for interest rates paid have trended higher since May. The Reserve Bank of India raised the policy repo rate in October by 25 basis points to 7.75% from 7.5% previously, as inflation remains stubbornly high.
Interest Rates Paid Records a Series High
73.2
45
50
55
60
65
70
75
Feb-
13
Mar
-13
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
Nov
-13
Interest Rates Paid
Current Conditions
Future Expectations
Interest Rates Paid
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions - 67.2 68.6 64.8 68.4 60.3 73.2
Future Expectations - 71.7 65.9 70.2 65.2 65.9 69.6
“Interest rates are high and it shall remain the same in the coming months, cost of borrowing is high.” Real Estate Holding & Development Company
Spitzzeile Titel28
w
Far fewer firms reported that the exchange rate was hurting their business.
The Effect of the Rupee Exchange Indicator rose significantly in November having fallen previously for four consecutive months.
MNI India Business Report - November 2013 29
The Effect of the Rupee Exchange Indicator rose significantly after having fallen for four consecutive months as far fewer firms reported that the exchange rate was hurting their business.
The Effect of the Rupee Exchange Rate Indicator increased to 43.4 in November from 30.9 in October.
Businesses are asked whether the exchange rate is helping or hurting their company and a value above 50 shows more firms reported that it was helping, while a reading below 50 shows the exchange rate was hurting.
While currency depreciations are often thought to be positive for businesses as exports become more competitive, the recent plunge in the Effect of the Rupee Exchange Rate Indicator belies this and shows how India’s reliance on imports of oil and other raw materials outweighs the benefit the devaluation brings for exporters.
Expectations for three months’ time also increased in November after four straight monthly declines. The Future Expectations Indicator rose to 43.5 in November from 30.1 in October, suggesting businesses expect the exchange rate to hurt less in the future.
The rupee has fallen sharply since US Federal Reserve Chairman Ben Bernanke warned in the summer that the Federal Reserve could start to taper its bond purchases this year. The announcement was followed by large capital outflows, pushing the rupee down over 17% to hit an all-time low against the US dollar at the end of August.
Effect of Rupee Exchange Rate Causes Less Pain
43.4
20
30
40
50
60
70
80
90
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-1
3
Sep-
13
Nov
-13
Effect of Rupee Exchange Rate
Current Conditions
Future Expectations
Effect of Rupee Exchange Rate
May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions 53.8 66.6 45.1 39.6 31.6 30.9 43.4
Future Expectations - 73.1 55.8 43.8 32.7 30.1 43.5
As soon as Raghuram Rajan took office as the Governor of Reserve Bank of India and announced a number of steps to restore confidence in the currency, the currency rebounded. A decision by the Federal Reserve to maintain its monetary stimulus for the time being on September 18 has given the rupee some more breathing room. Recent strong US data, however, has reignited fears in emerging markets that tapering could start earlier than expected. The Rupee was trading at 62.9 as of November 21, down 2.3% from the previous month.
MNI India Business Report - November 201330
Supplier Delivery Times remained broadly stable in November after they shortened in October by almost 10.0%. The indicator stood at 52.9 in November, 0.2 points above 52.7 in October.
From October to November, the Indicator measuring supplier delivery times decreased for the manufacturing sector for the second month in a row while it remained unchanged for the construction sector and rose for service sector companies.
Expectations for the next three months have trended upwards since June when the indicator hit a series low of 39.5. The expectations indicator stood broadly stable at 55.0 in November compared with 54.6 in October.
Supplier Delivery Times Remains Broadly Stable
52.9
30
40
50
60
70
Apr-1
3
May
-13
Jun-
13
Jul-1
3
Aug-
13
Sep-
13
Oct
-13
Nov
-13
Supplier Delivery Times
Current Conditions
Future Expectations
Supplier Delivery Times
Nov-12 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions - 59.6 57.1 52.5 58.4 52.7 52.9
Future Expectations - 39.5 50.9 49.6 56.1 54.6 55.0
MNI India Business Report - November 2013 31
The indicator measuring the Availability of Credit has trended upwards since April and reached a series high in September. In October, it fell sharply but it rose in November by 8.6% to 55.7 from 51.3 in October led mainly by construction and services companies for which credit availability improved .
Expectations for three months’ time increased by 4.6% to 59.2 in November from 56.6 in October. More construction companies expected their credit availability to improve in the next three months. Both manufacturing and service sector companies reported a fall in expectations for credit availability.
Availability of Credit Increased by 5.5% on the year
55.7
30
40
50
60
70
Nov
-12
Jan-
13
Mar
- 13
May
-13
Jul-1
3
Sep-
13
Nov
-13
Availability of Credit
Current Conditions
Future Expectations
Availability of Credit
May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13
Current Conditions 52.8 51.3 57.1 56.3 61.9 51.3 55.7
Future Expectations - 52.2 60.9 59.0 65.3 56.6 59.2
RBI Domestic Credit
0%
20%
40%
60%
80%
100%
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
Jan-
12
Mar
-12
May
-12
Jul-1
2
Sep-
12
Nov
-12
Jan-
13
Mar
-13
May
-13
Jul-1
3
RBI Domestic Credit y/y % (RHS)
RBI Domestic Credit (INR B)
Source: Reserve Bank of India
“Because of various policies of banks, our company is getting loans easily.” Speciality Financial Services company.
Spitzzeile Titel32
A selection of comments from the panel of businesses surveyed over the past month.
What the Panel Said
“Because of various policies of banks, our company is getting loans easily.” Speciality finance services company.
“Uncontrollable Inflation is a major issue. New financial year may offer better business conditions.” Software services company
“Current business condition is not good for manufacturing sector.”Manufacturing company
“Productive capacity of company has been increased.” Construction Company
“Raw material cost has increased as compared with last month.” Construction Company
“January to March is the best period for our business, so the coming months will be great to our business.” Media Company
“The marriage season has started in Gujarat, so we expect good business.” Hotels Company
“All our goods are exported, so the rupee devaluation is helpful.”Hardware Company
“Input prices are higher because we import some parts.” Software Services Company
“There are no new orders with company.” Investment Services Company
“Input prices are slightly higher than last month, and may further increase in the coming months.”Technology Company
“We are targeting 20% growth next year, so we will recruit more employees.” technology company
“Currently our financial position is the same compared with last month but we will expand business activities in the near future.” Recreational Services Company
“Service taxes are waived off till 2014 by the government, so it reduces our costs by 5%.” Hotels Company
“Until the elections, we are not expecting any good sign of growth.”Broadcasting and Entertainment Company
“Interest rates are high and it shall remain the same in the coming months, cost of borrowing is high.” Real Estate Holding & Development Company
“Our company is looking for more production in coming months.” Telecommunications Company
MNI India Business Report - November 2013 33
Spitzzeile Titel34
34 Historical Summary
35 Historical Records
36 Historical Records - Quarterly
Data Tables
MNI India Business Report - November 2013 35
Historical Summary
2012 2013
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
MNI India Business Indicator
Current Conditions 56.8 63.6 60.6 53.6 56.1 47.5 50.5 60.6 51.8 64.0 59.4 59.8 64.6
Future Expectations 53.8 55.4 49.7 52.0 60.6 67.6 75.5 77.1 68.8 69.5
Production
Current Conditions 58.1 66.0 59.4 55.6 53.8 41.0 45.6 54.8 56.9 59.9 67.3 57.5 65.3
Future Expectations 49.7 55.0 41.3 51.6 59.4 76.3 71.8 76.8 64.8 68.8
New Orders
Current Conditions 43.3 49.5 50.8 55.8 53.4 39.7 44.9 58.7 61.9 64.0 69.1 59.5 62.9
Future Expectations 53.2 54.9 40.4 46.4 58.4 76.8 75.0 78.5 69.5 68.5
Export Orders
Current Conditions 53.7 49.5 41.3 43.7 52.9 57.7 55.0 63.2 55.6 58.8
Future Expectations 56.0 54.1 45.2 50.9 62.6 68.9 62.6 75.5 57.7 60.8
Productive Capacity
Current Conditions 46.2 57.4 54.0 56.5 52.3 41.0 45.6 50.6 55.4 61.7 64.0 58.1 61.3
Future Expectations 56.1 54.8 40.7 50.9 56.7 68.8 67.4 70.3 65.1 65.2
Order Backlogs
Current Conditions 57.8 59.3 48.5 49.4 47.0 52.9 42.9 45.3
Future Expectations 59.6 32.8 43.6 39.4 57.5 43.4 48.8
Employment
Current Conditions 53.2 51.8 52.3 51.3 54.1 53.3 51.3 48.9
Future Expectations 51.8 52.3 53.6 52.0 53.4 51.1 49.5
Inventories
Current Conditions 59.9 47.8 48.9 55.9 51.6 60.1 50.0 50.0
Future Expectations 48.6 31.0 35.5 52.9 53.7 50.7 53.3
Input Prices
Current Conditions 67.9 64.4 78.6 79.6 66.7 74.1 63.3 73.0
Future Expectations 66.9 74.9 74.0 62.1 72.9 65.3 72.5
Prices Received
Current Conditions 44.9 54.9 55.4 59.8 53.1 42.2 41.5 50.8 67.1 56.6 61.8 54.9 60.8
Future Expectations 55.8 57.8 45.1 47.3 49.2 73.7 57.0 67.0 57.3 63.8
Financial Position
Current Conditions 54.1 60.6 62.6 56.3 55.1 53.4 56.1 63.0 57.6 68.1 72.3 58.6 69.9
Future Expectations 51.6 56.2 56.0 53.5 63.1 73.3 78.0 83.3 71.1 74.2
Interest Rates Paid
Current Conditions 69.2 65.5 52.9 52.8 67.2 68.6 64.8 68.4 60.3 73.2
Future Expectations 63.7 52.9 50.0 71.7 65.9 70.2 65.2 65.9 69.6
Effect of Rupee Exchange Rate
Current Conditions 53.8 61.8 68.5 77.8 69.1 47.8 53.3 66.6 45.1 39.6 31.6 30.9 43.4
Future Expectations 75.5 66.6 54.2 49.4 73.1 55.8 43.8 32.7 30.1 43.5
Supplier Delivery Time
Current Conditions 51.9 53.1 59.6 57.1 52.5 58.4 52.7 52.9
Future Expectations 59.0 39.5 50.9 49.6 56.1 54.6 55.0
Availability of Credit
Current Conditions 52.8 50.5 41.5 57.1 53.6 41.1 44.8 51.3 57.1 56.3 61.9 51.3 55.7
Future Expectations 57.6 53.8 40.9 47.9 52.2 60.9 59.0 65.3 56.6 59.2
MNI India Business Report - November 201336
Historical Records
2012-2013
Minimum Maximum Mean Median
MNI India Business Indicator
Current Conditions 47.5 64.6 57.6 59.4
Future Expectations 49.7 77.1 63.0 64.1
Production
Current Conditions 41.0 67.3 57.0 57.5
Future Expectations 41.3 76.8 61.6 62.1
New Orders
Current Conditions 39.7 69.1 54.9 55.8
Future Expectations 40.4 78.5 62.2 63.5
Export Orders
Current Conditions 41.3 63.2 53.1 54.4
Future Expectations 45.2 75.5 59.4 59.3
Productive Capacity
Current Conditions 41.0 64.0 54.2 55.4
Future Expectations 40.7 70.3 59.6 60.9
Order Backlogs
Current Conditions 42.9 59.3 50.4 49.0
Future Expectations 32.8 59.6 46.4 43.6
Employment
Current Conditions 48.9 54.1 52.0 52.1
Future Expectations 49.5 53.6 52.0 52.0
Inventories
Current Conditions 47.8 60.1 53.0 50.8
Future Expectations 31.0 53.7 46.5 50.7
Input Prices
Current Conditions 63.3 79.6 71.0 70.5
Future Expectations 62.1 74.9 69.8 72.5
Prices Received
Current Conditions 41.5 67.1 54.1 54.9
Future Expectations 45.1 73.7 57.4 57.2
Financial Position
Current Conditions 53.4 72.3 60.6 58.6
Future Expectations 51.6 83.3 66.0 67.1
Interest Rates Paid
Current Conditions 52.8 73.2 64.3 66.4
Future Expectations 50.0 71.7 63.9 65.9
Effect of Rupee Exchange Rate
Current Conditions 30.9 77.8 53.0 53.3
Future Expectations 30.1 75.5 52.5 51.8
Supplier Delivery Time
Current Conditions 51.9 59.6 54.8 53.0
Future Expectations 39.5 59.0 52.1 54.6
Availability of Credit
Current Conditions 41.1 61.9 51.9 52.8
Future Expectations 40.9 65.3 55.3 57.1
MNI India Business Report - November 2013 37
Historical Records - Quarterly
Q1 13 Q2 13 Q3 13 Quarterly Change Quarterly % Change
MNI India Business Indicator
Current Conditions 56.8 52.9 58.4 5.5 10.4%
Future Expectations - 54.1 73.4 19.3 35.7%
Production
Current Conditions 56.3 47.1 61.4 14.3 30.4%
Future Expectations - 50.8 75.0 24.2 47.6%
New Orders
Current Conditions 53.3 47.8 65.0 17.2 36.0%
Future Expectations - 48.4 76.8 28.4 58.7%
Export Orders
Current Conditions - 46.0 58.6 12.6 27.4%
Future Expectations - 52.9 69.0 16.1 30.4%
Productive Capacity
Current Conditions 54.3 45.7 60.4 14.7 32.2%
Future Expectations - 49.4 68.8 19.4 39.3%
Order Backlogs
Current Conditions - 55.2 49.8 -5.4 -9.8%
Future Expectations - - 46.8 - -
Employment
Current Conditions - 52.4 52.9 0.5 1.0%
Future Expectations - - 53.0 - -
Inventories
Current Conditions - 52.2 55.9 3.7 7.1%
Future Expectations - - 47.4 - -
Input Prices
Current Conditions - 70.3 73.5 3.2 4.6%
Future Expectations - - 69.7 - -
Prices Received
Current Conditions 56.1 44.8 61.8 17.0 37.9%
Future Expectations - 47.2 65.9 18.7 39.6%
Financial Position
Current Conditions 58.0 57.5 66.0 8.5 14.8%
Future Expectations - 57.5 78.2 20.7 36.0%
Interest Rates Paid
Current Conditions - 57.6 67.3 9.7 16.8%
Future Expectations - 58.2 67.1 8.9 15.3%
Effect of Rupee Exchange Rate
Current Conditions 71.8 55.9 38.8 -17.1 -30.6%
Future Expectations - 58.9 44.1 -14.8 -25.1%
Supplier Delivery Time
Current Conditions - 54.9 56.0 1.1 2.0%
Future Expectations - - 52.2 - -
Availability of Credit
Current Conditions 50.7 45.7 58.4 12.7 27.8%
Future Expectations - 47.0 61.7 14.7 31.3%
MNI India Business Report - November 201338
Methodology
MNI India Business Sentiment is a monthly poll of Indian business executives at companies listed on BSE (formerly known as the Bombay Stock Exchange). Companies are a mix of manufacturing, service, construction and agricultural firms.
Respondents are asked their opinion on whether a particular business activity has increased, decreased or remained the same compared with the previous month as well as their expectations for three months ahead, e.g. Is Production Higher/Same/Lower compared with a month ago?
A diffusion indicator is then calculated by adding the percentage share of positive responses to half the percentage of those respondents reporting no change. An indicator reading above 50 shows expansion, below 50 indicates contraction and a result of 50 means no change.
Data is collected via telephone interviews. Around 200 companies are surveyed each month.
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