Biz confidence in pvt firms at 88%: Study

Business confidence across privately held companies in the country is at a high of 88 per cent.

Business confidence across privately held companies in the country is at a high of 88 per cent,making India as the most optimistic nation in the world about its economy,during April-June quarter,says a study. According a study — International Business Report by Grant Thornton International Ltd,an accounting and consulting firm said,88 per cent of Indian businesses,highest among other nations,are optimistic about the country’s outlook for the second quarter.

In contrast,business optimism has fallen 13 per cent collectively in the BRIC group (Brazil,Russia,India and China)of economies,it said.

The survey,which was conducted among 2,697 privately held businesses businesses across the globe in May/June 2011,said business optimism declined by three per cent globally from the previous quarter although it is 4 per cent higher over the year-ago period.

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In global terms the past three months have been challenging and business optimism has been hit hard. Companies are feeling the effects of the unrest in the Middle East and the subsequent volatility in oil and commodity prices,which recently led western nations to release large stocks of oil. In addition,the earthquake and nuclear disaster caused huge disruption to supply chains, Grant Thornton International CEO Ed Nusbaum said.

Besides,employment is the key economic indicator for optimism followed by investment in building and reseach and development (R&D)

The country’s optimism relating in Q2 of calender year 2011 for employment has increased by 9 per cent from the previous quarter,followed by investment in new building (seven per cent) and R&D (five per cent).

Interestingly,Indian business owners anticipate employment to increase in 2011 by 76 per cent as compared to 47 per cent in the previous year. This year it is considerably higher than other BRIC members with Brazil at 62 per cent and China at 52 per cent.

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The main constraints that Indian business owners expect this quarter is shortage of long term finance,reduced demand and infrastructure.

Further,the trend is most acute in Latin America,where optimism fell 15 per cent over the last quarter. Argentina,Brazil and Chile,key economies in the region,saw optimism fall by 30 per cent,24 per cent and 10 per cent,respectively in the second quarter of the year.

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