30-40% MSMEs planning to increase their workforce in next quarter: SIDBI outlook

NEW DELHI: Micro, Small, and Medium Enterprises (MSME) across manufacturing, trading and services (other than trading) sectors noted an uptick in their business performance in the October-December 2024 quarter, as per a survey by Small Industries Development Bank of India (SIDBI). The employment scenario was broadly steady in the December 2024 quarter with majority of respondents’ employee strength remaining unchanged.

The expectations on the future, however, are bullish with 30-40 per cent planning to increase their workforce in the next quarter. The optimism is more pronounced in the manufacturing sector and relatively sedate in trading, it said.

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 the form of MSME-Business Expectations Index (M-BEI) and MSME-Business Conditions Index (M-BCI), that provide a steady flow of insights into the current performance of MSMEs in India and their perception.

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

Manoj Mittal, Chairman and Managing Director, SIDBI said “I firmly believe that the continuous flow of quality information on MSMEs through this survey will help all stakeholders in evaluating the current business climate and fine-tune their respective approaches.”

The MSMEs engaged in manufacturing activity were most positive with the M-BCI for the Manufacturing sector exhibiting the strongest business confidence reading of 60.33, closely followed by the Services M-BCI at 59.67.

The M-BEI projects consistent optimism for the next four quarters, with indices above 60 and manufacturing even above 70, reflecting bullish sentiment on parameters like sales, profitability, and expectations of improved availability of skilled labour, access to finance and overall business situation.

The survey found that the majority of MSMEs are optimistic about sales growth, buoyed by positive sentiment on order books, production and rise in selling price for the next quarter and a year ahead as well.

Respondents in the manufacturing sector are expecting rise in input costs. However, with higher production quantity and increase in average selling price, about half of them expecting an increase in the profit margin a year ahead.

About a sixth of the respondents in all sectors were not happy with the labour productivity and availability of skilled labour during the survey period. However, they expect the same to improve in the year ahead.

The share of positive responses towards willingness to invest in environmental protection measures and adopting new technologies is rising going forward. (ANI)