Key Trends and Industry Sentiments: Insights from CII’s 128th Business Outlook Survey

The Business Outlook Survey by CII (Confederation of Indian Industries) is a quarterly update on the prevailing industry sentiments on multiple parameters, as well as a general outlook for the economy. Over the years, the report has come to become a vital resource in discussions surrounding the Indian economy. 

The latest 128th Business Outlook Survey was Conducted in September 2024, featuring responses from 200 firms across diverse sectors including agriculture, mining, services, utilities, and manufacturing. With participation from companies of all sizes, it offers a comprehensive snapshot of industry expectations and sentiments for the near future.

Key Findings of the Survey

1. Business Confidence 

The CII Business Confidence Index (CII-BCI) rose to 68.2 in the second quarter of the current fiscal year, registering an upward trend from the previous reading of 67.3 in the previous quarter (Q1 FY25). 

The CII-BCI is a confidence indicator that is based on the opinion surveys of firms and their expectation of rise in production, orders, demand and stocks of finished goods. A rising BCI is an indicator of good overall economic health and optimism among businesses, which can lead to more investments and future growth. 

2. Drivers of Economy in FY25 

The survey highlights several growth drivers for the current fiscal year, including improved consumption patterns, favourable monsoon conditions, robust kharif crop sowing, increased private investments, moderate inflation, and strong corporate and banking balance sheets.

These factors underscore the resilience of the Indian economy amid global uncertainties.

3. Increase in Private Investments 

59% of the respondents believed that the trend in private capex in H1 FY25 will improve as compared to the level in H2 FY24. 35% of the respondents believed that this trajectory will remain unchanged and only a small portion of 6% expect the trend to deteriorate. As private investments remains sluggish overall, Gross Fixed Capital Formation (GFCF) has seen an increase in Q1 of FY24-25, showcasing a positive sign for the Indian economy. 

41% of the respondents also feel that their domestic investments would see an increase in the second quarter of the current fiscal. Interestingly, 40% of the respondents also feel that their investment plan will see no changes in the international arena. This showcases confidence in the future of our economy, favourable policies and rising demand as opposed to the uncertainty about the global market. 

4. Increase in expenditure and profits 

35% of the respondents feel that the cost of raw materials will remain unchanged, while 34% believe that the costs will increase. While there is a mixed response in terms of future expectation of input costs such as electricity, fuel, wages and cost of credit, the expectations of profits earned is high. 45% of the respondents believe that their bottom-line will improve in the quarter. It is interesting to note that despite the expectation of increased expenditure, the profit expectation remained steady due to the combined anticipation of more sales and new orders. 

5. Increase in Employment 

With nearly 49% of firms projecting an increase in employment due to improvements within their companies, the survey signals a robust employment outlook. Only a minimal 7% of respondents expect a decline in workforce numbers.

6. Business Concerns 

Among top business concerns, 24% of respondents cite protracted geopolitical tensions, 18% highlight rising global commodity prices, and 17% are concerned about decreasing external demand. Additional concerns include fluctuating consumption patterns, food price volatility, and financial market instability.

The 128th Business Outlook Survey underscores both the challenges and optimism shaping the Indian business landscape. While external geopolitical factors and global market uncertainties persist, high industry confidence in domestic opportunities bodes well for continued economic growth. Indian businesses’ strong outlook on profit, employment, and investment provides a promising trajectory for the coming quarters, supporting sustained GDP performance.