Mumbai: Business outlook of manufacturing sector is seen improving in the second quarter of FY'15 on account of improved situation, production, order book and capacity utilisation. According to a survey by Reserve Bank, business outlook of manufacturing sector, as inferred from movements in Business Expectation Index (BEI), there is an improvement for second quarter of FY'15 at 114.7 against previous quarter's 111.1. It was at 112.7 in the corresponding quarter a year ago.
"The improvement in BEI for the expectation quarter is mainly due to improved optimism on overall business situation, production, order books, capacity utilisation, imports, exports added with the reduced pessimism on cost of finance, cost of raw material and the profit margin," RBI survey said. Two per cent of the respondents felt there will be increase in production during second quarter, but employment will decline, suggesting a jobless growth. In another survey on 'Consumer Confidence Survey: June 2014' a significant improvement in Future Expectations Index (FEI) was seen at 122.9 for June quarter due to increase in positive perceptions on all selected parameters except prices.
FEI was at 114.9 in the quarter ended March 2014. The Current Situation Index (CSI) in June quarter stood at the threshold level (100.4) against March 2014 (99.9). Consumer confidence survey shows successive improvement in income expectations over the last four quarters, it said. "More than 60 per cent of the respondents expected increase in income 12 months ahead," as per the survey.
Respondents reported higher confidence on spending. About 25-30 per cent of respondents said it was a good time for making outlays for big ticket purchases like house, durable goods and gold. Survey on 'Inflation Expectations Survey of Households: June-2014', said proportion of respondents seeing price rise by more than current rate for overall prices and prices of all product groups have decreased compared with previous round's survey for both 3-month ahead period and 1-year ahead period. However, "the survey shows that retired persons and daily workers have marginally higher level of inflation expectations based on median inflation rates." It said respondents from Chennai, Guwahati, Lucknow and Nagpur cities have relatively higher expectation for inflation.
