Business sentiments in the country continue to be low with the corporate sector’s optimism index for the fourth quarter of 2015 posting a drop of 4.1 per cent over the third quarter of the year, according to a Dun & Bradstreet report.
The Business Optimism Index (BOI) — a measure of six parameters including net profits, net sales, selling prices, new orders, inventories and employee levels — stands at 122 during fourth quarter of 2015 compared to 127.2 in the sequential quarter, the report said. “The political stalemate witnessed in Parliament on two critical pieces of legislation, the Land Acquisition Act and GST Bill, raised concerns about the government’s ability to go ahead with its reform commitments and dented business confidence. Monsoon deficiency, weak new investment demand and rising global financial market volatility also operated as binding constraints on business sentiment,” senior economist of Dun & Bradstreet, Arun Singh, said in a release.
Based on the responses received, it was observed that three out of the six optimism indices — sales volumes, net profits and new orders — have registered an increase as compared to third quarter of 2015, it added. Around 80 per cent of the respondents expect volume of sales to increase in the fourth quarter of 2015, while 5 per cent feel that the sales volume would decline.
The remaining 15 per cent expect volume of sales to remain unchanged in quarter under review.
For calculating the composite BOI, each of the six parameters is assigned a weight and the results aggregated according to the given ratios.
The survey is conducted on a sample of companies that are selected randomly from D&B’s commercial credit file.