State Of The Economy 2015

Racing ahead, slowly

Though market sentiment and the general business environment has improved, key concerns remain unaddressed

Exactly a year ago, the business sentiment across industrial clusters in the country was so depressing that not a single optimistic voice could be heard. Coupled with rising costs and shrinking margins, the uncertainty in the economic environment left many entrepreneurs worried about their collective future. Cut to 2015 and we are happy to report that the situation is much better. In their travels to nine industrial clusters across the country — Aurangabad and Chakan, Baddi, Kishangarh, Morbi, Naroda, Noida and Faridabad, Sriperumbudur, Tiruppur and Karur and Visakhapatnam — Outlook Business’ reporters found the general mood to be hopeful and, in some cases, clearly optimistic. Orders are materialising and there is willingness to make investments in what they think is a more stable environment.

Though both minor and major niggles remain, sentiment has improved across clusters

Of the 106 people surveyed across the clusters, nearly half said that sales in FY15 were better than the preceding year; 29% said the situation was stable. Over 65% of respondents believe that the current fiscal will be a better year for business, with 60% saying they will be able to maintain profitability in this period; last year’s figures for both these questions stood at 59% and 53%, respectively.

While this optimism may have something to do with a mild improvement in demand and order book, there are some chronic concerns that can’t be wished away. Labour costs double nearly every five years and add to the list of rising costs. A whopping 91% of all respondents confirmed that labour costs have indeed gone up, with 58% saying that raw material costs have gone up as well.

 Problems aplenty

For the

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