Business sentiment moderates in 2nd quarter of FY25: NCAER-NSE survey

Economic sentiment tapers off in the second quarter

Business sentiment moderated in the second quarter of FY25, as firms were less upbeat about the economy compared with earlier, found a NCAER-NSE survey released on October 18.

NCAER-NSE Business Expectations Survey declined to 134.3 compared with 149.8 in the previous quarter and 140.7 in the second quarter of FY24.

“While all four components of the BCI experienced slight moderation in sentiments between the first and second quarters of 2024–25, the percentage share of positive responses remained well above 50%, signalling continued economic dynamism,” said Bornali Bhandari, professor, NCAER.

The survey, which collected data from nearly 500 firms, found that 62.1 percent of the firms noted that the economy is likely to do well in the coming six months, while 58 percent highlighted that they expected their own financial position to improve as well.

“Sentiments about exports of final products continued to remain upbeat, even though a relatively smaller number of firms expected them to increase over the next six months,” the survey pointed out.

India’s industrial output contracted for the first time in 22 months in August, according to data released by the government last week.

Exports were, however, 0.5 percent higher in September and 1 percent higher in the first six months of the year.

In what would be good news for the government, 96 percent of the firms reported capacity utilisation at optimal or above optimal levels, which could indicate the start of the private investment cycle to spur growth.

The Reserve Bank of India, in its latest policy review, maintained India’s growth forecast at 7.2 percent, predicting 7.4 percent growth in the second half of the year.