Cautious Optimism Among Indian SMEs for Q3 2024

Indian small and medium businesses remain cautiously optimistic about Q3 2024 performance, according to the ASSOCHAM-Dun & Bradstreet Small Business Confidence Index. The index rose by 0.2% compared to Q2 2024, reflecting stabilization in demand after four high-performing quarters. Challenges persist in profitability, new investments, and hiring amid higher production costs and geopolitical uncertainties.

Small and medium businesses in India are cautiously optimistic about their business performance for Q3 2024, according to the ASSOCHAM-Dun & Bradstreet Small Business Confidence Index (SBCI). The index, which measures the level of optimism on key business parameters like sales, employment, prices, inventory, and investment, increased moderately by 0.2% from Q2 2024. 'As is clear from the latest IMF World Economic Outlook, the Indian economy is projected to be the fastest growing amongst the leading economies of the world. Our survey among SMEs' executives clearly highlights the significant contributions from small businesses,' said ASSOCHAM Secretary General, Mr. Deepak Sood.

The ASSOCHAM D&B SBCI has recorded a modest uptick of 0.2% for Q3 2024, following three consecutive quarters of rising optimism. The survey indicates that overall demand sentiments within the economy are stabilizing at current levels, after riding high for four consecutive quarters. The slight moderation in demand growth is echoed in most of the parameters recorded in the survey.

'The ASSOCHAM D&B Small Business Optimism Survey highlights mixed signals in the Indian economy. There's strong optimism in areas like sales, liquidity, and credit flow. However, optimism about profitability and new investments is slowing down. Higher production costs and stagnant selling prices are likely impacting profitability. The steady Small Business Confidence Index (SBCI) from the previous quarter suggests businesses are consolidating past gains while waiting for new momentum. Due to geopolitical uncertainty, companies are hesitant to invest in new capacity and are instead maximizing existing resources to meet increased sales,' said Mr. Avinash Gupta, Managing Director, Dun & Bradstreet India.

(With inputs from agencies.)