World Economics - Insight , Analysis and Data

World Economics - Insight , Analysis and Data

The Sales Managers' Index: India

Released: October 28, 2014

Market Growth Index falls for the first time in a year

  • SMI continues to reflect strong economic activity in October
  • Confidence hits highest level on record
  • Prices fall for the fourth consecutive month

The World Economics India Sales Managers’ Index (SMI), a composite indicator, provides the most up-to-date monthly assessment of economic activity in the country.

The Headline Index (derived from an average of the Business Confidence, Market Growth, Sales, Prices and Staffing Indexes) signalled the third successive month of decline. The index fell marginally to 66.8 in October, from 67.0 in September, indicating that economic activity continues to grow at a rapid pace, but that the rate of growth has decelerated very slightly.

Business Confidence
The Business Confidence Index rose by 1.0 points to 92.5 in October, after falling by 0.3 on the prior month. This marks the highest level since the panel began in February 2012, and indicates that surveyed companies are expecting the overall economic situation to become better over the coming months.

Market Growth
The Market Growth Index fell for the first time since October 2013. The Index registered 63.6 in October, down from 65.6 in September, the steepest fall in over a year, and indicates that panellists continue to experience strong levels of market growth, but that the pace of growth has decreased.

Product Sales
The Product Sales Index increased for the second consecutive month to 69.9 in October, from 68.2 in September, the fastest pace since the panel started in 2012. Panel members commented that the surge in sales was mainly helped by lower prices of food and fuel as global crude oil prices continue to fall.

Prices Charged
The Prices Charged Index fell to 50.7 in October, from 51.5 in September, the lowest level since March, when the index stood below the 50 (no-change) mark that separates growth from contraction. The index has been falling consecutively for the past five months, suggesting that inflationary pressures continue to ease.

Staffing Levels
The Staffing Index fell for the third month running in October. The index stood at 57.4, down from 58.2 in September, signalling the weakest pace since January 2014. Sales Managers reported lower rates of job creation compared to the prior three months.

World Economics Chief Executive Ed Jones commented:
“October’s SMI readings continued to indicate robust levels of domestic demand in India. However, the headline index has been falling for the past three months, suggesting that the rate of growth has slowed from its July’s peak. The decline can be mainly attributed to the sharp fall in Market Growth and the ongoing decrease/weakness in prices.

In spite of this, Sales Managers remained very optimistic about future business conditions as a stable government and an improved macroeconomic environment have helped pushing up business sentiment.”


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Amelia Myles, Communications Manager
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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’ Indexes
The Sales Managers’ Indexes are a series of new products available for Africa, Asia and the Americas, designed to raise the voice and profile of sales people throughout the world. 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 Chinese 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, as well as the China, India and Eurozone Growth Monitors.

About World Economics
World Economics is an organisation dedicated to producing analysis, insight and data relating to questions of importance in understanding the world economy.

Currently our primary research objective is to encourage and assist the development of better and faster measures of economic activity. In cases where we believe we can contribute directly, as opposed to through highlighting the work of others, we are producing our own measures of economic activity.  

Our work is mainly of interest to investors, organisations and individuals in the financial sector and to significant corporations with global operations, as well as governments and academic economists.

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

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

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