What’s the news?
Indian business leaders are optimistic about investment in 2022
What does that mean?
Investments by the corporate sector are critical to higher growth rates and economic development. Investment in capacity expansion creates a multiplier effect in the economy by generating both direct and indirect employment, boosting consumption and fostering development.
An ET Poll conducted recently shows CEOs and business leaders being bullish over a pick-up in private investment. According to the poll, over 94% of the respondents are likely to undertake capital expenditure over the next three years.
Half of them expect their sectors to recover and see high-capacity utilisations. That said, there are near term headwinds as such concerns over omicron, ongoing supply chain disruption, input cost inflation and so on.
With that in mind, the good side is that the production and import of capital goods are up. Higher government spending, strong order books and speeding up the pace of project execution will push up demand, improve revenues and profitability for companies, enabling them to invest more.
The IHS Markit India Manufacturing Purchasing Managers’ Index stood at 55.5 in December. A reading above 50 indicates economic expansion. The reading for the October-December period stood at 56.3, the highest since the final quarter of FY21
How does that impact your wealth?
If private investment picks up it will speed up the economic recovery which will impact investments in a positive way