MSME Business Confidence Index Surges in Q3 2023

Strategic Insights -

The latest ASSOCHAM -- Dun & Bradstreet Small Business Confidence Index (SBCI) survey for Q3, 2023 has indicated a surge in business optimism among Small and Medium Enterprises (SMEs) in India. The SBCI jumped to 105 in Q3, up by 23 per cent from Q2 2023, reflecting a quarter-on-quarter growth in optimism across various parameters. Despite tight inflationary measures by the Reserve Bank of India (RBI), about 69 per cent of respondents were hopeful of normal credit availability in Q3, with businesses planning to expand with new hiring and investments in fixed capital.

Key Takeaways:

  • The ASSOCHAM -- Dun & Bradstreet Small Business Confidence Index (SBCI) jumped to 105 in Q3 2023, up by 23 per cent from Q2 2023, indicating a surge in business optimism among SMEs.
  • 80 per cent of SMEs anticipate rising costs to translate into increased selling prices in Q3, primarily due to limited bargaining power, potential supply chain bottlenecks, and uncertainty in commodity prices.
  • Higher sales prices and a robust demand outlook are likely to favour higher profitability during the quarter, as indicated by the SBCI survey.
  • 6 out of 7 businesses were optimistic about higher domestic order inflow demand during the quarter, while they are hopeful about improvement in their own business prospects despite weakness in the external economy.
  • About 69 per cent of respondents were hopeful of normal credit availability in Q3, with businesses planning to expand with new hiring and investments in fixed capital.
  • Three in four respondents have indicated planned capital expenditure and hiring expansion, indicating a positive outlook for the Indian economy.

Statistics:

  • The SBCI jumped to 105 in Q3 2023, up from 85 in Q2 2023, representing a 23% increase.
  • 80% of SMEs anticipate rising costs to translate into increased selling prices in Q3.
  • 6 out of 7 businesses were optimistic about higher domestic order inflow demand during the quarter.
  • About 69% of respondents were hopeful of normal credit availability in Q3.
  • 75% of respondents have indicated planned capital expenditure and hiring expansion.

Sources:

  • ASSOCHAM -- Dun & Bradstreet Small Business Confidence Index (SBCI) survey for Q3, 2023.
  • Reserve Bank of India (RBI) inflationary measures.
  • MSME Business Confidence Index report.
  • Deepak Sood, Secretary General, Assocham.
  • Dr Arun Singh, Global Chief Economist, Dun & Bradstreet.