D&B Business Optimism Index stands at 94.6, highest since Q2 2014

Mumbai, Nov 13 The Dun & Bradstreet Composite Business Optimism Index stands at 94.6 for Q4 2021, an increase of 27.4% compared to the Q3 2021 survey. Five out of six optimism indices have registered an increase as compared to Q3 2021. The Dun & Bradstreet Composite Business Optimism Index, which has been measuring the changing business sentiment of India Inc. since 2002, is a leading indicator for India's overall growth with a correlation co-efficient of 80 per cent with the Gross Domestic Product (GDP).

"The GDP growth during October – December quarter of 2021 is likely to be strong as Dun & Bradstreet Business Optimism Index, the leading indicator of economic activity, has surged to an almost eight-year high. The government support in terms of accelerated vaccination drive, measures taken to increase FDI inflows, initiatives to boost the domestic manufacturing base along with facilitating investment clearances have been instrumental in driving the optimism level of businesses," says Arun Singh, Global Chief Economist, Dun & Bradstreet.

The consumption boost to India Inc, from easing lockdown restrictions, pent up and festive demand, arrears payment of dearness allowances along with improving consumer confidence levels, are quite evident from the optimism for new orders which has climbed to the highest level since Q3 2014. Interestingly, optimism for hiring employees has risen to the highest in 10 years, signaling buoyant demand conditions as more people get back to jobs. Sustenance of the optimism level of businesses, however, depends on how effectively domestic supply challenges are managed and inflationary pressures are controlled. As prices in general are expected to go up driven by supply disruptions and rising commodity prices, both consumer spending and corporate earnings are at risk, he added.