New Delhi, May 3: Even as inflationary pressure continues, small and medium enterprises (SMEs) are bullish on business expansion and export orders.
As per a Assocham-Dun & Bradstreet joint survey, as many as 77% SMEs expect their net sales to increase while 86% hope export orders to grow suggesting export-led demand growth in the current April-June quarter.
As many as 75% of SMEs expect an increase in their domestic orders.
?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 amongst the SMEs’ executives clearly points towards significant contributions from the small businesses,? said Assocham Secretary General Deepak Sood.
The survey said that businesses see an increase in their average capacity utilization rate to 63% in Q2 2022, up from 57% in Q1 2022. Further, an overwhelming 77% of SMEs expect an increase in their new fixed capital investment indicating optimism for future demand.
“As many as 76% of SMEs expect an increase in their workforce, even as they have to deal with the price pressure. 80% of the SMEs expect raw material prices to increase, whereas 75% see upward revision in their selling prices. Consequently, the percentage of SMEs expecting an increase in their net profits stood a tad below other indicator at 77,” the survey said.
Commenting on the findings of the survey, Arun Singh, Global Chief Economist, Dun & Bradstreet said that the combination of rising input costs and increasing freight expenses is a key source of concern for businesses.
“Given that the majority of newly ordered tonnage is not planned for delivery until 2023, global container freight rates will continue to remain elevated in the coming months. As the survey indicates, not all producers will be able to pass on the increased costs to their customers, eroding profit margins, he said.
(UNI)
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