A survey of 392 companies by Federation of Indian Chambers of Commerce and Industry (FICCI), showed that concerns about an economic slowdown, inflation and rising costs hurt business confidence of Indian firms during October-December 2007 period. The FICCI business confidence index declined to a new five-year low of 55.3 points in the third quarter of 2007/08, from 61.2 in the previous quarter.
Regarding the outlook for January-June 2008 period, 38% of the companies predict net profit to decline while 26% expect higher profits, FICCI said. About 58% of the firms expect higher sales, and 10% forecast a decline during the first half of 2008.
Companies from across sectors have reported rising prices of industrial raw material as a serious concern with regard to their business performance, FICCI said. The only silver lining was that nearly 54% of the firms reported that their investments are likely to increase in the coming six months, it said.