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The Sales Managers' Index: India

Released: May 26, 2015

Indian economic activity remains very strong despite easing in May

  • Companies remain upbeat despite lower activity
  • Market growth eases further as monthly sales weaken
  • Inflationary pressures weakened but only fractionally

The Headline Sales Managers’ Index (SMI) for India fell for the first time since September 2013. The Index dropped to an eight-month low of 67.0 in May, having posted the highest readings in the survey’s history over the past three months (68.2). The slowdown in the headline index mainly reflected weaker rates of business confidence, market growth and product sales. Furthermore, prices charged and employment levels eased for the second month running, albeit at a slower rate compared to last month. That said, despite the cooling since February, the rate of economic activity remained very high in the context of the historical data, with May’s reading still well above the long-term series average of 61.1.

Despite reports of weaker growth, Indian companies remained exceptionally optimistic about their prospects for activity over the coming months. The Business Confidence Index stood at 90.5 in May, down from 92.6 in April. A stable macro-economic environment, governmental measures to stabilize the economy and attract investment were cited as the main factors behind the optimism. That said, the degree of optimism was the lowest since June 2014.

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