Like many macro variables, the Oct 09 reading of the NCAER’s Business Confidence Index (BCI)1 indicates that sentiment is returning to pre-crisis levels. The index rose 21.2% on a QoQ basis and 19.8% on a YoY basis. While the uptrend can be attributed
to seasonality (Oct is the festive season), it is supported by trends in industrial production, PMIs and is a clear signal that a recovery is under way.
Most parameters have seen a strong and broad-based recovery both on an annual as well as quarterly basis. The upturn in the BCI is reflected across all sectors with services up 25.1%, consumers durables up 24.5%, non-durables up 18.7%, intermediate goods up 20.7% and capital goods up 19.2%. We expect sentiment to remain firm in coming months.