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The Sales Managers' Index: India

Released: February 22, 2015

Indian SMI continues to reflect rapid economic growth in February

  • Future Business Confidence remains very high
  • Monthly Product Sales hit the highest level on record
  • Staffing Levels continue to pick up pace

The World Economics India Sales Managers’ Index (SMI), a monthly indicator derived from SMI surveys, is by far the most up-to-date assessment of economic activity in the country.


Overview
The Headline Index rose to 68.2 in February from 68.0 in January, signalling only a fractional improvement in business conditions and that the Indian economy continues to rise at a rapid pace. The Index (calculated from an average of the Business Confidence, Market Growth, Sales, Prices and Staffing Indexes) remained well above the 2013-2014 and 2014-2015 averages of 57.6 and 64.1 respectively. That said, official figures showed that India’s economy expanded by 7.4% in 2014 compared to 6.9% in 2013.


Business Confidence
The Business Confidence Index fell to 91.2 in February, from 91.4 in January, indicating the third successive month of declines but that surveyed businesses are still exceptionally optimistic about the outlook for business. Surveyed managers pointed out that the very high levels of business sentiment are a result of improved economic conditions, positive investment climate and rise in capacity utilisation.


Market Growth
The Market Growth Index, which reflects growth of the general marketplace in panellists’ own industry sectors, fell marginally to 63.4 in February, after increasing to 63.6 in January. However, the latest reading of 63.4 is still well above the long-term average of 58.7 and suggests that sales managers continue to experience high levels of market demand across the country.


Product Sales
TThe Product Sales Index rose by 1.8 to 74.7 in February, after falling slightly by 0.6 to 72.9 in January. This is the highest level recorded in the panel, and an indication that sales remain increasing at a fast pace. Panel members commented that the continuing decline in food and oil prices is contributing to these very high levels of sales growth.


Prices Charged
The Prices Charged Index edged down slightly to 51.1 in February, from 51.6 in January, indicating that sales managers continue to increase prices at a modest pace. An index above 50 indicates an expansion, while an index below 50 indicates a contraction. However, the modest increases in prices are partly due to an ongoing decrease in global commodity prices.


Staffing Levels
The Staffing Index rose for the fourth consecutive month running in February. The Index came in at 60.8, up from 60.4 in January, signalling the quickest pace since June 2014 and the job market continues to pick up pace with the increasing demand in the marketplace.


World Economics Chief Executive Ed Jones commented:
“February’s SMI data showed only a fractional improvement in economic activity in India. The slight improvement in activity can be mainly attributed to a significant increase in monthly sales. The Staffing Levels Index rose but only marginally, while other indexes including the Business Confidence, Market Growth and Prices Charged registered a slight decline.

Overall, the majority of surveyed managers remained very positive about future business conditions in the Indian economy.”







 













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Amelia Myles, Communications Manager
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Methodology
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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There are 12 comments on this paper.
(Have an opinion? Add your Comment above)

Bikram
52 days ago
Great information

Satinder pal singh sawhney
97 days ago
Can I get information about productivity in dairy business

Satinder pal singh sawhney
97 days ago
Can I get information about productivity in dairy business

Satinder pal singh sawhney
97 days ago
Can I get information about productivity in dairy business

Satinder pal singh sawhney
97 days ago
Can I get information about productivity in dairy business

Satinder pal singh sawhney
97 days ago
Can I get information about productivity in dairy business

Satinder pal singh sawhney
97 days ago
Can I get information about productivity in dairy business

Satinder pal singh sawhney
97 days ago
Can I get information about productivity in dairy business

Satinder pal singh sawhney
97 days ago
Can I get information about productivity in dairy business

Satinder pal singh sawhney
98 days ago
Thanx

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

aruna nishanka
1037 days ago
This is a nice initiative from you, thank you




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