Skip to main content

58% of India's business leaders feel manufacturing cost is up, 61% say profit is less than normal: IIM-A survey

Current costs per unit compare with this time last year: % responses
By Our Representative
An Indian Institute of Management-Ahmedabad (IIM-A) survey has found that nearly one-fourth of Indian manufacturing firms have reported “significant increase (by 6.1% to 10%) in costs”, while around three-fifth of firms reported that “increase in costs has been more than 3% during the last one year”.
Pointing out that “this proportion has been increasing during last 3 months”, the survey finds that 58% of 1,949 business leaders feel that manufacturing costs are up, either moderately (3.1-6%), or significantly (6.1%-10%), or up very significantly (more than 10%).
Suggesting that, overall, things do not seem to be improving fast enough, the survey, carried out in May 2018, finds that just about 12% said profits were “somewhat greater than normal” or “much greater than normal” as against 13% a month earlier, in April.
Profit Margins: % response
Even as saying that “the proportion of firms responding ‘much less than normal’ profit has been consistently declining over the last four months”, the survey finds that 38% of respondents said profits were “much less than normal”, down from 41% a month earlier, another 23% said, they were “somewhat less than normal”, and 27% said they were “about normal.”
The survey also finds that, “one year ahead business inflation expectation in May 2018, as estimated from the mean probability distribution of unit cost increase, is placed at 4.1%”, adding, “Inflation expectations remained above 4% for the last two consecutive months.”

Profit margins: % response
At the same time, it says, “Uncertainty of business inflation expectations in May 2018, as captured by the square root of the average variance of the individual mean probability distributions, has marginally declined to 2.14% from 2.24% observed in April 2018.”
Coming to the sales, the report states, “28% of the firms in the sample reported that sales are ‘much less than normal’, and “this proportion has been quite stable during last six consecutive months”, adding, “For the first time, over half of the firms in the sample reported that sales levels are becoming normal or greater than normal. Overall data shows gradual improvement in sales conditions.”
One year ahead business inflation expectations (%)
IIM-A’s Business Inflation Expectations Survey (BIES), released last week, examines the amount of slack in the economy by polling a panel of business leaders about their inflation expectations in the short and medium term. A monthly survey, it asks year-ahead cost expectations and factors influencing price changes, such as profit, sales levels, etc.
Claiming to be unique, the IIM-A report on the survey says, it “goes straight to businesses, the price setters, rather than to consumers or households, to understand their expectations of the price level changes”, adding, “One major advantage of BIES is that one can get a probabilistic assessment of inflation expectations and thus can get a measure of uncertainty.”
Also providing “an indirect assessment of overall demand condition of the economy”, the report says, “Results of this Survey are useful in understanding the inflation expectations of business and complement other macro data required for policy making.” Introduced in May 2017, the questionnaire of BIES is based on feedback received from industry leaders, academicians and policy makers.
Companies, mostly in the manufacturing sector, are selected from the list of companies as available with the Ministry of Corporate Affairs (MCA). The 12th round of survey is based on the responses of 1,941 companies.

Comments

TRENDING

Noam Chomsky, top scholars ask NRIs to take stand on human rights violations in India

Counterview Desk
Renowned world scholars, including Noam Chomsky, James Petras, Angela Davis, Fredric Jameson, Bruno Latour, Ilan Pappe, Judith Butler, among others, have issued a statement castigating the Narendra Modi government for allegedly creating an environment of fear through arrests, intimidation and violence.

Actionable programme for 2019 polls amidst lynch mobs, caste violence, hate mongering

Counterview Desk
Reclaiming the Republic, a civil rights network, has released a document prepared under the chairmanship of Justice AP Shah (retired) -- and backed, among others, by Supreme Court advocate Prashant Bhushan, bureaucrat-turned-human rights activist Harsh Mander, economist Prabhat Patnaik, Right to transparency activist Anjali Bhardwaj and social scientist Yogendra Yadav  (click HERE for full list) -- with the "aim" of putting forth policy and legislative reforms needed to “protect” and “strengthen” the Constitutional safeguards for India’s democratic polity.

India under Modi "promoted" crony business, protected financial fraudsters, fueled bigotry

By Sandeep* and Rahul Pandey**
Narendra Modi's ascension to power was accompanied with jubilation and expectation. His supporters were expecting an end to era of corruption and initiation of good governance which was described as Achche Din. His party's adherence to idea of nationalism was believed to make India a vibrant country and guide India to be a world leader. He gave the slogan of 'Sabka Saath, Sabka Vikas' conveying that his government was for all.
Corruption The government system is infested with corruption. A minimum of 10% is siphoned off from government schemes and projects, some of which goes back to political party in power and remaining is pocketed by various administrative, executive and political functionaries. This corruption continues and has increased. Now an additional Rashtriya Swayamsewak Sangh (RSS) person working as Official on Special Duty or some equivalent position in every government department also has a share in this booty.
The Narendra M…

Inviting Rajapaksa to India "insult" to 1,40,000 Tamils killed by Sri Lankan army

Counterview Desk
In the context of Sri Lankan opposition leader Mahinda Rajapaksa being invited in India, about 75 human rights activists*, claiming to be concerned about rights violations during the civil war in Sri Lanka, especially in 2009, have joined together to express their dissent through a statement.

Modi wants Pak govt be held responsible for JeM terror strike: World doesn't agree

By Sandeep Pandey*
I went to participate in a candle light homage paying event at Dr BR Ambedkar's statue organised by about 200 Dalit students on Hazratganj main crossing in Lucknow on February 16, 2019 evening, two days after the dastardly terrorist act in Pulwana, Jammu and Kashmir (J&K), in which 44 Central Reserve Police Force (CRPF) personnel was killed.

Post-advisory, Govt of India appears reluctant to ban e-cigarettes, "harmful" to kids

By Rajiv Shah
Is the Government of India dilly-dallying over the issue of banning e-cigarettes, which have been declared by anti-tobacco activists across the world as providing “an entryway to nicotine addiction”, especially among the kids? It would seem so, if the latest developments are any guide.

A Godse legacy? BJP rulers have "refrained" from calling Gandhi Father of the Nation

By Dr Hari Desai*
What an agony! On one hand, the entire India is celebrating the 150th birth anniversary of Mahatma Gandhi under the leadership of Prime Minister Narendra Modi, but on the other side, so-called Hindu Mahasabha members have been found mock-enacting the killing of the Mahatma and celebrating the murder by distributing sweets!

No aadhaar, no ration? Hard blow by Gujarat govt on poor and marginalized

By Pankti Jog*
Only those who have aadhaar registration and linked it with ration card will get ration from a Public Distribution System (PDS) shop. This decision of the Gujarat government has hit very badly thousands of poor and marginalized communities of Gujarat, especially during the drought year.

Not just Indian women engineers, men too face sexual harassment at workplace: US study

By Rajiv Shah
A recent research, carried out jointly by two US-based non-profit organizations, Society of Women Engineers (SWE) and Center for WorkLife Law (WLL), based at the University of California, Hastings College of the Law, has found that 45% of women engineers as against 28% of men engineers complained that it was perceived as “inappropriate when women argued at work, even when it was work-related.”

Anti-liquor march: Women padyatris "resolve" to occupy Karnataka state assembly

By Abhay, Swarna Bhat*
At a huge public convention held at Siddaganga Mutt on the Republic Day, January 26, 2019, in the presence of Sanehalli Sri Panditaradhya Swamiji, padyatris of the Madya Nishedha Andolana decided to intensify the ongoing liquor ban movement. A resolution passed at the convention, in which thousands of rural women joined in, the marching women declared that on reaching Bengaluru will “occupy Vidhan Soudha” on Mahatma Gandhi’s martyrdom day, January 30.