World Economics - Insight , Analysis and Data

World Economics - Insight , Analysis and Data

The Sales Managers' Index: India

Released: August 26, 2014

SMI signals continued strong levels of growth in August

  • Business Confidence at a very high level
  • Product sales remain buoyant
  • Staffing levels fall for third successive month

The India Headline Sales Managers’ Index (SMI), a composite indicator (derived from an average of the Business Confidence, Market Growth, Sales, Prices and Staffing Indexes) provides the most up-to-date monthly assessment of economic activity in India.

The Headline Index fell slightly to 67.3 in August, down from 67.7 in July. This marks the first time that the Index has fallen since October 2013, and indicates that activity remains rising at a rapid pace.

Business Confidence
The Business Confidence Index barely changed from its July value, increasing slightly by 0.1 to 91.8 in August, the highest level since the panel began in February 2012.

Panellists have attributed this to the formation of the business-friendly government in India. Modi’s pro-business and pro-job creation agenda are cited as the main reasons for the very high levels of business confidence.

Market Growth
The Market Growth Index reflects growth of the general marketplace in panellists’ own industry sectors.

The August Index remained unchanged from last month, suggesting that Sales Managers are still experiencing very high levels of growth in the market, in line with notable levels of business confidence.

Product Sales
The Product Sales Index, which represents sales made by respondents’ own companies, fell for the first time in 11 months in August.

The Index decreased to 67.5, down from 68.6 in July, indicating that sales are still growing at a fast pace but that the rate of growth has slowed slightly.

Prices Charged
The Prices Charged Index edged down marginally to 52.8 in August, from 52.9 in July, suggesting that prices continue to increase but at a slower pace compared to last month.

Staffing Levels
The Staffing Index, which reflects the number of staff taken on compared to the same period last year, fell for the third successive month to August.

The Index dropped to 58.9, down by 1.3 on July, the lowest level since February 2012. This indicates that the labour market remains strong but that the pace of increase has decelerated compared with the previous two months.

World Economics Chief Executive Ed Jones commented:

"Despite a marginal fall in the August Headline SMI, driven mostly by a fall in the Sales and Staffing Indexes, the overall monthly reading suggests that economic activity in India continues to grow at a rapid pace. Business Confidence remains at records high while Market Growth at highest level since April 2012."


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Notes to Editors
The Sales Managers’ Index is produced by World Economics and is based on original survey data collected from a panel of Sales managers in all sectors of the Indian economy except those controlled by the Government.

The Sales Managers’ Index results are calculated by taking the percentage of respondents that report that the activity has risen (“Increasing") and adding it to one-half of the percentage that report the activity has not changed (“Unchanged"). Using half of the “Unchanged" percentage effectively measures the bias toward a positive (above 50 points) or negative (below 50 points) index. An example of how to calculate a diffusion index: if the response is 40% “Increasing," 40% “Unchanged," and 20% “Reducing," the Diffusion Index would be 60 points (40% + [0.50 x 40%]). A value of 50 indicates "no change" from the previous month.

The more distant the index is from the amount that would indicate "no change" (50 points), the greater the rate of change indicated. Therefore, an index value of 58 indicates a faster rate of increase than an index value of 53, and an index value of 40 indicates a faster rate of decrease than an index value of 45. A value of 100 indicates all respondents are reporting increased activity while 0 indicates that all respondents report decreased activity. 

About the Sales Managers’ Index
The Sales Managers’ Indexes are a set of unique economic activity reports covering a wide range of sectors and industries (except those controlled by Government) in over 70 countries worldwide. The Sales Managers’ Indexes provide the earliest indication each and every month of the direction of economic activity, and the speed at which its markets are growing. 

Sales Managers are unique as an occupational group in being really at the front line of economic activity. The Sales Manager is ideally placed to feel the first few whispers of caution in the market or to see the new green shoots of economic recovery. 

The Sales Managers’ Index brings together the collective wisdom of Sales Managers and consequently produces the best and earliest source of understanding about what’s really happening in the economy. 

The Sales Managers’ Index has been developed by World Economics, a leading edge provider of original economic data. Sister products include the World Economics Journal, the World Price Index, the Global Marketing Index, and Country Growth Trackers.

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735 days ago
Good to see real expertise on display. Your contributoin is most welcome.

aruna nishanka
873 days ago
This is a nice initiative from you, thank you

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