New Delhi: A majority of business executives expect sales volume to improve in the coming six months as economic situation has somewhat improved, a study has said.
Over 61 percent of business executives surveyed felt that their sales volume would increase in the next six months while 64 percent of respondents said selling prices would be more or less at the same level as the pricing power of the companies will not change, the study conducted by Assocham-Bizcon said.
"The survey showed that economic situation has somewhat turned better in the last six months. Further, there is an expectation of situations to improve further in the short to medium term horizon at both industry as well as firm level," the study added.
However, profit margins would remain constant at the present level as companies would not be able to raise the selling price.
Regarding fresh investment, as many 36 percent of the respondents felt investment levels are "bound to remain" at current levels.
"Drop in commodity prices, mainly that of crude oil, coal and gold, has helped the sentiment turning better. However, exports prospects still remain worrisome and the rupee may not considerably improve despite continuous inflows in the stock markets which have turned better," Assocham President Rajkumar N Dhoot said.
"Few factors such as weak demand in export market, rising imports in the home market, poor infrastructure, high cost of credit and increasing raw material prices continue to adversely affect the business performance thereby slowing down the pace of growth of the industry," the study added.
The study, conducted in March, showed that 64.1 percent of the firms were engaging at high level of capacity utilisation whereas in December, only 48.2 percent seemed to be doing so.
Additionally, over 56 percent of the respondents were of the opinion that their order books position would further improve in the coming six months.
The survey showed increasing wage costs continue to be a worrying factor for the industry, with 69 percent of the respondents expecting this would adversely impact their performance.
"There seems to be some improvement with regards to the availability of credit as the survey results show that 44 percent of the industry believes that limited availability of credit is not a cause of concern for them," Dhoot added.