February 2011 - CII

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policy pulse75 th <strong>CII</strong> Northern Region Business Outlook SurveyHIGHLIGHTS• As many as 74% of the respondents expect GDP growth of 8%or more as against 61% in the previous October-December2010-11 Survey, reflecting a very strong positive sentimentfor the economy.2. OUTLOOK ON BUSINESS PROSPECTSCurrent conditions vs the July-September 2010 (% ofRespondents)• Expectations of high inflation. 98% of the respondents expectinflation to be 5% or more, as against 90% in the previoussurvey.• Outlook for the current three months much stronger than theactual performance in the last three months.• Business prospects on key elements –capital investment,capacity utilization, sales, new orders & production are allexpected to improve further in the current three months• Positive sentiment on the export front. Optimism on value,production and new orders.• Credit availability remains an area of concern with 66% ofthe respondents expecting no increase in credit availability.33% of the respondents expect the cost of credit to increase.• Top three concern areas are cost & availability of labour, risinginterest rates, and inflationary conditions.Note: Respondents were asked to rate scores ranging from 0, 25, 50, 75 & 100(0 for significantly worse and 100 for significantly better)Business Expectation: January - March <strong>2011</strong> (% ofRespondents)• The survey is based on responses received from industry acrossthe Northern Region states and captures the outlook of theindustry across the Northern Region.1. OUTLOOK ON THE ECONOMYAs many as 74% of the respondents expect GDP growth of 8% ormore as against 61% in the previous October-December 2010-11survey, reflecting a very strong positive sentiment for the economy.Expectation on GDP Growth (2010-11) (% of Respondents)Note: Respondents were asked to rate scores ranging from 0, 25, 50, 75 & 100 (0for significantly worse and 100 for significantly better)In line with the bullish growth sentiments, the outlook for thecurrent three months is stronger than the actual performancein the last three months. More than 50% of the respondentsreported the current conditions as much better than the last threemonths for the Indian Economy, their respective sectors and alsotheir own companies.The expectation for the next six months is even better witheven a greater percentage of the respondents rating the next sixmonths as 75 & 100, as compared to the current conditions.12 C I I n o r t h e r n r e g i o n n e w s l e t t e r
policy pulse3. AVAILABILITY AND COST OF CREDIT4. VOLUME AND VALUE OF EXPORTSAvailability of Credit (% of Respondents)Volume of Exports (% of Respondents)The survey reveals credit availability as a concern area. 81% ofthe respondents did not witness any increase in credit availabilityin the last three months. 58% of the respondents expect no changein the credit availability as against 59% reporting no change in thelast three months. However, percentage of respondents expectingno increase for the current three months decreased to 66%.As high as 86% of the respondents expect an increase in volumeof exports and another 14% expect status quo. As against this, only52% of the respondents reported an increase in exports duringthe last three months.Cost of Credit (% of Respondents)Value of Exports (% of Respondents)Only 33% of the respondents expect the cost of credit to increaseduring the current three months and another 50% expectingstatus quo.There is similar optimism in terms of value of exports; with 81%of the respondents expecting an increase. This is higher than theexpectation level (68% of the respondents) recorded during theprevious survey for the period October - December 2010.f e b r u a r y 2 0 1 113
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February 2011 - CII

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