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India ranks second in the Regus Business Confidence Index 2012

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In January 2012 the Confederation of Indian Industry (CII) announced its results for a survey on India’s business confidence for the quarter that ended in December 2011. TOI reported the glum results with business confidence index (BCI) for the third quarter of 2011-12 having declined 5 percent from 53.6 in the previous. This fall was estimated due to uncertainty in the global economy, high interest rates and rising inputs costs. The report further recommended improvements to be made in areas of land availability, transportation infrastructure, availability and cost of power, labour reforms, cost of capital, taxation regime and environmental clearances to improve business confidence ratings.

Regus Business Confidence Index 2012 was based on the opinions of over 16,000 business managers and owners from 86 countries, considering their views on profit trends, revenue and expected growth. The report sets a benchmark average of 100 points.

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Highlights of the report

In April 2012, the Regus Business Confidence Index (BCI) placed Brazil (148 points) India (143 points) and China (130 points) on the top three positions. The report stated these there emerging nations as the key drivers to the economy in 2012.

Here’s are the results from the Regus report worth knowing.

  • Japan stood at a low of 82 points. The report estimates that confidence may be low because of the 2011 earthquake tragedy and the country might still be reeling with the after effects.
  • The global average stood at 113 points. The last time this report was released, the average was 112 points.
  • The number of Indian companies reporting revenue growth increased to 69 percent. The same figure in September 2011 was 52 percent.
  • The number of Indian companies reporting profit growth was 58 percent.
  • Along with China, Germany also secured a spot in the first three with 132 points. This is a significant increase from September 2011, when Germany’s score was in the negative.
  • The global level score remained constant at 51 percent as compared to September 2011.
  • Large businesses will remain more optimistic through 2012 with a BCI rating of 124 as compared to small businesses with a BCI rating of 107.
  • Indian firms identified two main factors for corporate distress during the downturn. One being the payment for unnecessary office space ringing in at 61 percent and the second reason being difficulty in accessing cost effective capital, which was 58 percent.
  • Wider distribution of customers and flexible working conditions for employees were the two areas in which significant contribution could be made to increase future stability and growth in the Indian economy, Rediff reported.

While such results seem extremely delightful and endearing for our country, what is to be seen is whether India will be able to sustain worldwide expectations of driving the economy throughout 2012. Consistent growth, stable political conditions and penetration of government reforms in rural areas remain key factors in maintaining business confidence.

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