According the `Quarterly Review 2007 Business Expectations Survey'' published
by the National Council of Applied Economic Research (NCAER), the Business Confidence
Index (BCI) and the Political Confidence Index (PCI) for the January-March quarter
this year fell by 3.8 per cent over the previous quarter.
BCI slipped from its level of 157.3 points in the previous quarter to 151.3 points.
The survey points out that the BCI fell in all four of its main components - overall
economic conditions, investment climate, financial positions of firms and capacity
utilisation. The survey further states that the perception of firms on the current
investment climate has seen the steepest fall.
startling highlight was that the BCI has seen a decline in all the sectors. While
the capital goods sector showed the least decline, the intermediates sector showed
the highest BCI decline.
Among the four regions of the country, the Western
and Southern regions saw a greater loss in business confidence.
the loss in BCI does not imply any decline in the key performance
indicators of firms. The production, domestic sales, exports, imports and profits
are all expected to increase in the next six months.