Small business sentiment slides in July-September

Small business sentiment slides in July-September
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Highlights

Small business sentiment continued to slide for the third quarter in a row in July-September, a survey by state-run Sidbi and rating agency Crisil said on Monday.

Mumbai: Small business sentiment continued to slide for the third quarter in a row in July-September, a survey by state-run Sidbi and rating agency Crisil said on Monday.

It also pointed out that the way things have panned out during the survey quarter are bleaker than the expectations of immediate future presented in the preceding quarter.

The survey comes at a time when the economic growth slid to a six-year low of 4.5 per cent for the July-September period. It also comes about a year after the Shaktikanta Das-led RBI rolled out a loan recast package for small enterprises after government prodding.

The MSME segment, which is generally called as the biggest employment generator, also presented a difficult picture from a job growth perspective.

The number of companies reporting an addition to their employee base more than halved to 7 per cent from 16 per cent in the preceding quarter, it said, adding that 87 per cent reported maintaining of jobs while remaining 6 per cent reported a reduction.

Bankers are also not very hopeful of the MSME segment, with half of them calling their MSME loan performance as "below satisfactory", four of ten as "satisfactory" and only one calling it as an "improvement".

The 'Crisidex' survey score went down to 106 points for the second quarter of the fiscal year, as against 120 in the preceding April-June quarter and 124 for the year-ago period, a statement said.

It said typically, expectations for the next quarter are higher than actual sentiment for a quarter but the difference between the expectations and the actual turnout has been the sharpest in the second quarter in the eight surveys done by the company.

The preceding quarter had revealed a score of 129 on future expectations, while the actual turnout was a score of 106, it said, adding that both services and manufacturing firms have similar opinions.

"The survey findings need to be viewed in the context of macroeconomic factors such as production cuts by automobile manufacturers impacting utilisation of components, decline in both volume and realisation in commodity-linked sectors such as steel, and a slowdown in consumption impacting gems and jewellery, and hotels," Crisil's Chief Operating Officer Amish Mehta said.

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