MSME
SIDBI Launches First Edition of MSME Outlook Survey to Gauge Business Sentiment
Most MSMEs anticipate increased sales and order books driven by rising demand and improved pricing power. Although manufacturing firms foresee higher input costs, nearly 50% expect an increase in profit margins due to higher production volumes and better pricing strategies.
The Small Industries Development Bank of India (SIDBI) has introduced the MSME Outlook Survey, a quarterly report designed to assess and track business sentiment in India’s Micro, Small, and Medium Enterprises (MSME) sector. The initiative aims to bridge data gaps by providing insights into current business conditions and future expectations through two key indices: the MSME-Business Expectations Index (M-BEI) and the MSME-Business Conditions Index (M-BCI).
The survey, conducted across 1,200 MSMEs from the manufacturing, services, and trading sectors, evaluates 22 critical parameters, including sales growth, profitability, employment trends, access to finance, cost of funds, and ease of doing business.
Key Findings from the Survey
Positive Business Sentiment
MSMEs across sectors improved their business performance from October to December 2024. The Manufacturing sector showed the highest business confidence, with an M-BCI of 60.33, followed closely by the Services sector, at 59.67.
Strong Optimism for Future Growth
The M-BEI, which forecasts business sentiment for the next four quarters, remained above 60 across all sectors, with manufacturing exceeding 70. Businesses expect growth in sales, profitability, skilled labour availability, and access to finance.
Sales and Profitability Outlook
Most MSMEs anticipate increased sales and order books driven by rising demand and improved pricing power. Although manufacturing firms foresee higher input costs, nearly 50% expect an increase in profit margins due to higher production volumes and better pricing strategies.
SIDBI launched “MSME Outlook Survey”- a quarterly report on MSME Business Sentiment. On the basis of a survey of MSMEs spread across Manufacturing, Services and Trading sectors, the report attempts to bridge the data gap in the MSME sector by developing a lead + lag indicator, in…
— Small Industries Development Bank of India (@sidbiofficial) February 6, 2025
Employment Trends and Skilled Labor
The employment scenario remained stable in the October-December 2024 quarter, with most businesses keeping their workforce unchanged. However, 30-40% of MSMEs plan to expand their workforce in the next quarter, with the manufacturing sector showing the most hiring optimism. Around 16% of respondents expressed concerns about low labour productivity and a shortage of skilled workers, but they expect improvements in the coming year.
Digital and Technological Advancements
MSMEs are increasingly adopting digital platforms for sales and marketing. A growing number of businesses are also willing to invest in environmental protection measures and new technologies to enhance productivity and sustainability.
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Improved Infrastructure and Ease of Doing Business
Over 70% of MSMEs across sectors reported satisfaction with infrastructure, electricity supply, and permit processes. In the last quarter, 15% of businesses noted improvements in obtaining permits and clearances, and optimism rose about further enhancements in the coming year.
SIDBI’s Commitment to MSME Growth
Manoj Mittal, Chairman and Managing Director of SIDBI, emphasized the vital role of MSMEs in India’s economic growth. Manoj Mittal SIDBI noted that the sector was identified as one of the four key growth engines of the economy in the recent Union Budget. “MSMEs serve as the crucial foundation of the Indian economy and a powerful instrument for socioeconomic change. SIDBI has always recognized their incredible contribution and remains committed to their development through financial and non-financial initiatives. This survey will provide valuable insights to help stakeholders fine-tune their strategies based on the evolving business climate.”
The MSME Outlook Survey will be published quarterly, ensuring policymakers, financial institutions, and business leaders receive real-time insights to support decision-making and growth strategies. The complete report is available for download at SIDBI MSME Outlook Survey.
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