80% SMEs Expect To Pick Up In Orderbook In Coming Months: Survey
According to the survey, 79 per cent of the respondents anticipated that access to credit will be normal in Q3, one percentage point higher than the trendline for the preceding quarter
With a pick-up in demand, as many as 80 per cent of the small and medium enterprises (SMEs) anticipate an increase in their domestic order book in the third quarter of the calendar year, as per the latest ASSOCHAM- D&B small business confidence index.
Riding on improved confidence, small businesses participating in the survey intend to raise their capacity utilisation to 60 per cent in Q3 of the calendar year of 2022, up from 55 per cent in Q2 2022.
”SMEs anticipate their average capacity utilisation rate to increase optimism with regard to fresh investment remaining more or less intact with 75 per cent of SMEs anticipating an increase in their fixed capital investment. It was marginally lower than the 77 per cent recorded in Q2, but remained robust, it said.
“While the RBI has been tightening the monetary policy compelled by inflation, SMEs do not find any concern with regard to the availability of credit. Good thing is that the latest RBI credit policy statement gave an assurance that enough liquidity would remain in the system,” said Deepak Sood, Secretary General, ASSOCHAM.
He expressed hope that the banks would continue to meet the working capital requirements of the SMEs ahead of the ensuing festive season.
Sood said it is up to the large companies both in the private and public sectors to ensure that their SME vendors are paid well in time so that the payment and receipts cycle remains smooth and seamless.
”This is critical for meeting the working capital requirements of the SMEs well in time, more so when the festive season holds promise for faster recovery and particularly for the SMEs, both in manufacturing and services,” he said.
According to the survey, 79 per cent of the respondents anticipated that access to credit will be normal in Q3, one percentage point higher than the trendline for the preceding quarter.
This is despite an increase in the interest rates in recent months and the continuation of the same in the immediate future.
