Business Confidence Stabilizes in India

Mumbai: Amid Eurozone crisis and uncertain economic climate, emerging economies of India and Brazil have topped the Business Confidence Index confirming their role as key drivers of the global economy, according to the global Regus Business Confidence Index. The Business Confidence Index is based on interviews conducted during January 2012 of over 16,000 business respondents from the Regus global contacts. Brazil (148) and India (143) top the business confidence chart confirming their role as key drivers of the global economy. At the other extreme is Japan which at 82 points appears to still be suffering from the March 2011 disasters. While still topping the Index, Indian businesses confidence has dipped 2 Index points to 143 from a high in September 2011. Nevertheless, Indian companies reporting revenue growth increased, reaching 69 percent compared to 63 percent six months ago. Companies reporting profit growth (58 percent) suffered a 1 percent squeeze. Mindful of the need to contain costs in the quest for sustainable growth businesses identify increased use of pay-as-you-go business services, increasing flexible workspace and a shorter supply chains the most effective cost cutting measures for the coming months. Looking back, Indian firms identify paying for unnecessary office space (61 percent) as the main reason for corporate distress during the downturn followed by difficult access to cost effective capital (58 percent). Respondents identified increased use of pay-as-you-go business services (49 percent), increasing flexible workspace (40 percent) and a shorter supply chain(39 percent) as the areas where companies could best make savings without damaging growth prospects. Indian firms report that a wider distribution of customers (40 percent) and more flexible working conditions for staff (35 percent) would make the greatest contribution to enhancing future business stability as a platform for growth. The Business Confidence Index rating is lower for small businesses (134) than for large firms (156). Madhusudan Thakur, Regional Vice President, South Asia, Regus comments, "Although untouched by the significant setback between March and September 2011 suffered by other global economies, Indian business confidence has now suffered a slight dip. In spite of this, the proportion of companies reporting revenue growth has grown although there is a small squeeze in those reporting profits. However, in order to grasp growth opportunities in a sustainable way, businesses globally are still looking to cut overheads without damaging their growth prospects." He further says, "In particular, in India where the budget reportedly may slim down corporate earnings by 2 percent, respondents confirm they are seeking to rely on more flexible working practices ranging from a greater use of pay-as-you-go business services to more flexible working conditions for staff. With solutions readily available on the market for flexible workspace arrangements there is no doubt that the number of businesses benefiting from more nimble and scalable arrangements will increase in the coming years." Every six months the Regus Business Confidence Index presents a view of global Business Optimism. This index is a measurement formed on an aggregate of positive statements combining year-to-date revenue and profit trends with views on the timing of the full momentum of economic recovery and aims to provide businesses across the globe with a barometer of business confidence and expected growth. The benchmark average for the index was set at 100 in the first publicly published edition in September 2009.