Indian business sentiment turned negative for the first time in more than a decade, reflecting pessimism on activity and profits following the coronavirus outbreak.
The business activity net balance fell sharply to -30% in June, from +26% in February, according to IHS Markit India Business Outlook survey results released Monday. This was the lowest reading on record and the first time that a negative outlook has been signaled since the series began in late-2009, IHS said.
Many respondents indicated that the outlook was unusually uncertain and were unsure of how activity would develop over the coming 12 months, according to IHS.
“The outlook for India was the worst globally,” said Andrew Harker, economics director at IHS Markit, referring to confidence level among all countries monitored by IHS. “There appears to be little light at the end of the tunnel at present.”
Input costs are predicted to fall, while output prices were forecast to rise only slightly amid weak customer demand, according to the IHS survey. Local companies, particularly those in services sector, look set to respond to falling activity by scaling back workforce numbers, it said.