Indian businesses optimistic about business growth in coming months

NEW DELHI: Indian service providers anticipate greater business activities in the coming months, notwithstanding slowdown concerns, says a KPMG survey.

"Indian service providers expect a marked rise in business activity over the next 12 months. The degree of positive sentiment has increased since June and is the second-strongest worldwide," according to a report titled 'Global Business Outlook'.

Manufacturers are also optimistic that both output and new orders will increase over the next year.

The report, however, forecasts gloomy business conditions in the manufacturing and service sectors around the world.

The survey, conducted among 11,000 companies worldwide, found a decline in optimism around key measures such as business activity, revenues and profits in the next 12 months amid widespread uncertainties surrounding the global economy and financial markets.

It said global business confidence plunged in October from June-- lowest level since the financial crisis began in 2008-09.

"The survey highlights a decline in business confidence since the previous survey in June. Amid widespread uncertainties surrounding the global economy and financial markets, companies have revised down their expectations regarding growth of activity, new business, revenues and profits.

"Staff recruitment plans have consequently been scaled back, while forecasts for investment have also been downgraded," KPMG said.

The survey covered countries such as Austria, Brazil, China, the Czech Republic, Germany, Greece, France, Ireland, India, Italy, Japan, the Netherlands, Poland, Russia, Spain, the UK, and the US.

Net balance for global business activity in manufacturing declined to 27.3 in October from 45.5 in June, while in the services sector it edged down to 33.2 from 38.2.

Europe saw the steepest decline due to the ongoing debt turmoil, but gloom has spread across the globe impacting both developed and emerging economies alike.

The report said weaker global economic conditions have also taken their toll on growth expectations in the principal emerging markets as companies in BRIC--Brazil, Russia, India and China-- signal a drop in optimism.

Much of the deterioration to the BRIC countries is accounted by China, which has also been affected by a slowdown in domestically-led expansion in the wake of policy tightening measures.

"Chinese firms are therefore the least positive among the BRIC region in the latest outlook survey. Better news is provided by strong improvements in confidence in the service sectors of both Brazil and India," it said.