Services sector bullish on 6-month prospects: Survey

By : |November 8, 2006 0

NEW DELHI: The services sector expects the economy to grow above 8 percent during the fiscal year 2006-07. CII’s first Services Sector Business Outlook Survey for the period July-December 2006 revealed major investment expansions.

The survey revealed that 92 percent of the respondents plan increases in investments . Of these 70% of the respondents revealed investments over Rupees 1 crore and 28 percent plan investments of Rs. 5 crores and above. The Services Sector revealed a positive Business Outlook based on parameters like sales, new projects, repeat orders and customers and billing rates. As many as 60 percent voted for billing rates as the leading parameter for a positive business outlook, that indicates they are moving up the value chain. A whopping 89 percent voted new customers a s the reason for a positive Business Outlook .

Keeping in tune with the UPA Government’s agenda to increase employment, 83 percent of the respondents felt employment will increase during July-December 2006, the CII survey indicates.

Other factors contributing to company growth prospects are new projects, voted by 90 percent of respondents, and a higher sales value, voted by 92 percent, says the CII Survey.

Things look bright on the export front as well, according to the CII survey. The value of exports is expected to rise as indicate d by 81 percent of the respondents. The positive exports outlook is butressed by the fact that 83 percent of the respondents expect increase in new customers and 62 percent of the respondents expect billing rates to improve.

However, the respondents feel the constraints on the movement of natural persons would remain to be the major cause of concern as revealed by 60 percent of the respondents Another third of the respondents feel these constraints may increase during the next six months. This calls for measures to mitigate existing restrictions on movement of natural persons .

The respondents to the survey were also upbeat about the economy. More than half (54 percent) expect the GDP to grow at over 8 percent during 2006-07. This reflects its performance during the first quarter of the current financial year when it grew at 8.9 percent compared to 8.5 percent in the previous year. This is due to the buoyancy in the manufacturing and services sectors.

The first-ever CII survey sector business outlook survey was planned to assess the confidence perception of the sector during July-December 2006 based on the emerging trends in the global and domestic environment. The survey explored business prospects as the macro and micro levels based on the parameters of income growth, employment, investment and trade.

The CII Services sector Business Outlook survey covered the gamut of the services sector, including business, communication services, construction and related engineering services, distribution, education, environment, finance, health, tourism and travel, recreation, culture, sports and other services.

© CIOL Bureau

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