However,
18
October
2012
|
00:00
Asia/Kolkata

Indian business confidence stalls in continued global business volatility

However, a sharp decline in business confidence index inmature economies is raising a warning flag that global business may facecontinued volatility for some months to come, the Regus business confidence surveystated.

India, however, fares better, as compared to China, whereconfidence levels have dipped, falling twenty points in the Regus BusinessConfidence Index (from 130 to 110) since April 2012.

Business confidence in some of theworld’s leading growth economies has dropped significantly over the last sixmonths. Despite the fall, levels of business confidence inrapidly growing economies still remains well ahead of levels in matureeconomies – yet this setback should act as a warning flag for businesses acrossthe world to stay nimble and expect further volatility before a general globalupturn, finds thelatest Regus Business Confidence Index (BCI) based on the views of more than24,000 senior business people from 92 countries.

In India, the Business Confidence Index rating is lower for smallbusinesses (135) than for large firms (151)and, given the important role of smalland medium-sized enterprises as an engine of growth and provider of jobs, thisfinding is of particular concern. Access to affordable credit and cash-flowmanagement were among their biggest concerns, highlighting the need forflexible, pay-as-you go business services allowing businesses to remainflexible and agile.

Key Findings and Statistics

·Globalconfidence levels have shown little change compared to six months ago; down 2percentage points to 111 since April 2012

·Theproportion of Indian companies reporting revenue increases slippedslightly to 67% compared to 69% in April 2012, while profitsincreased from 58% to 61%

·Lessthan two fifths (38%) of Indian respondents reported they were satisfied theirgovernment’s support strategies for business

·Thefollowing issues are major challenges to small businesses and start-ups:

-Cash-flow (35%)

-Lackof suitable office space (33%)

-Marketing (31%)

·Respondentsalso highlighted key measures for government to introduce that wouldsubstantially help small businesses and start-ups. These are:

-Tax exemptions (71%)

-Low interest loans (58%)

-Industry specific networking events(40%)

“It’s clear that there’s been a stagnation in businessconfidence, accompanied by significant falls in some rapidly developingeconomies since our last BCI report in April,” said Madhusudan Thakur, seniorVice President, south Asia Regus, “This suggests that slowing trade with Europeand Western economies, combined with a host of national factors, is taking itstoll. In India in particular, falling global demand and a delayed monsoon haverecently led the ADB (Asian Development Bank) to revise growth predictions downwards.[1]

Mr. Thakur said: “We were particularly struck by slowerimprovement amongst entrepreneurs and small businesses. In order to improvetheir cash situation, respondents identified affordable and flexible businessservices – especially for overheads such as workspace, administrative supportand sales/marketing. 45% of respondents, for instance, reported that one of themajor burdens during the downturn has been inflexible property leases. Flexibleservices allow businesses to be more agile and free-up cash for investmentwithout relying on credit at a time when it is so difficult to secure.”

The Regus Business ConfidenceIndex

In every edition, the Regus Business Tracker report presents an updatedBusiness Confidence Index. This index is a measurement formed on an aggregateof positive and forward-looking statements combining year-to-date revenue andprofit trends with views on the expected economic upturn in the coming monthsand aims to provide businesses with a single point of reference of the survey’skey findings. Its benchmark average was set at 100 in the first edition of theRegus Business tracker in September 2009.