Human Power - Viral Thaker HRD blog Headline Animator

Friday, May 23, 2008

Service sector growth confidence highest in India

 

The confidence of a robust growth in the services sector is the highest in India among the four BRIC countries including Brazil, Russia and China, with none of the 1,400 respondents of a survey by a global consultancy anticipating any drop in revenues.

"Almost 60 percent of BRIC service providers expect a rise in business activity over the coming year and only around two percent of firms anticipate a decline," says the survey conducted by KPMG.

 

"Confidence was highest in the Indian service sector. Around 60 percent of firms there expect a rise in activity while none expects a decline," as per the survey findings released here Tuesday.

The respondents of the Indian service sector also expect the growth in activity to be supported by a strong rise in volumes of new business with 56 percent of all companies forecasting an increase in new work.

Revenues are also set to rise markedly, underpinned by increased marketing activity, the introduction of new products and entry into new markets, says the survey, adding the forecast came despite intensifying competitive pressures.

Approximately 38 percent of companies stated that the availability of credit to their companies had improved compared with the situation prior to the financial market turmoil, which commenced last summer.

Only around eight percent of firms noted deterioration in credit availability and just two percent reported that their business was being constrained as a result.

However, the report said: "The cost of credit was widely reported to have risen since the start of the credit crunch, with 47 percent of companies signalling higher borrowing costs and less than eight percent noting a decrease."

"The buoyant confidence in the BRIC service sector suggests that rapid economic expansion is set to be maintained in 2008 and into 2009," said Ian Gomes, chairman of KPMG's New and Emerging Markets Group.

The KPMG survey is conducted four times a year covering manufacturing in January and July and services in April and October.

Viral Thaker
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