Business sentiment drops to record low, says D&B survey

MUMBAI: The Dun & Bradstreet Composite Business Optimism Index (BOI) for Q1 2009 fell to 95.7, the lowest value the index has registered since it was introduced in Q4 2002, indicating business sentiment has dropped to record low.

As compared to the previous quarter, the Index dropped much as 31.1 per cent - a record fall. On a y-o-y basis, the BOI recorded its largest ever decrease of 43 per cent, Dun & Bradstreet said in its survey here.

The increase in downside risks to growth prospects of the Indian economy, coupled with waning domestic and international demand, has hampered the business sentiment significantly, Dun & Bradstreet - India, Chief Operating Officer, Kaushal Sampat said in a statement here.

The tight credit condition, which prevailed in the economy at the time of the survey, has also dented the corporate sentiments to a certain extent, he said.

Further, the November terror attack in Mumbai has also impacted confidence negatively. The crisis of confidence faced by the economy in general and the business community in particular is reflected in the record low of 95.7 touched by the BOI in Q1 2009, he said.

Going forward, external cues and policy actions taken by the Government and their impact on the domestic demand conditions will play a key role in determining business expectations over the next quarter Sampat said.

The Index is recognised as an indicator that measures the pulse of the business community and serves as a reliable benchmark for investors. It is arrived at on the basis of a quarterly survey of business expectations.