Nearly 80% SMEs expect pick up in orderbook in coming months

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IANS | 25 Aug, 2022
Nearly 80 per cent of the Small and Medium Enterprises (SMEs) expect an increase in their domestic orderbook in the third quarter of calendar year, sequential improvement of five percentage points from the second quarter.

As per the latest Industry survey by Assocham-Dun & Bradstreet, riding on improved confidence, small businesses participating in the survey intend to raise their capacity utilisation to 60 per ent in Q3 of calendar year of 2022, up from 55 per ent in Q2 2022.

Optimism with regard to fresh investment remained more or less intact with 75 per ent of SME anticipating an increase in their fixed capital investment. It was marginally lower than the 77 per ent recorded in Q2, but remained robust, said the survey report.

While the RBI has been tightening the monetary policy compelled by inflation, SMEs do not find any concern with regard to availability of credit. "Good thing is that the latest RBI credit policy statement gave an assurance that enough liquidity would remain in the system," ASSOCHAM Secretary General Deepak Sood said. 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 sector 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," said Sood. Besides, timely payment of government dues and tax refunds would also be great help to the SMEs.

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 the recent months and the continuation of the same in the immediate future.