‘‘The decline in confidence in export potential essentially is an indication that demand may be on a decline because of the price increases. The seasonal nature of exports could also be one of the reasons for the decline’’ Mitra said.

While sales, profits and employment indices have come down, investment index has fallen from last quarter’s 61 to 45 and the chamber squarely blamed interest rates. ‘‘Industry is apprehensive about the cost of borrowing and calculations are going haywire and projects rethought. The time is clearly not ripe for interest rate to harden further,’’ Mitra added.

A similar slide was visible in the confidence levels of small scale industries where only 53% respondents were confident of achieving a stable growth compared to 63% a year ago and 72% in the previous quarter.

The Ficci survey finds an echo in NCAER’s quarterly review of the economy which indicated an 8% decline in business confidence index for June while revising its forecast for inflation to 4.6% to 4.3% on the back of rising crude oil prices. NCAER, however, predicted an economic growth of 7.9% for 2006-07 as compared to its earlier projection of 7.7% made in April.