The Second Quarterly Crisidex Survey shows Micro and Small Enterprises (MSEs) had a better January-March 2018 (called the Survey Quarter, or SQ), driven by gains in the

​Manufacturing ​S​ector, compared with October-December 2017. CriSidEx is a sentiment index based on a diffusion index of 8 parameters (5 ​M​anufacturing and 3 ​Services) that have equal weights. It measures business sentiment among MSEs during the ‘​S​urvey ​Q​uarter’ (SQ, or January-March 2018) and the ‘​N​ext ​Q​uarter’ (NQ, or April-June 2018) on a scale of 0 (extremely negative) to 200 (extremely positive).

As in the First Survey, the Second Survey also gathered parametric feedback from 1,100 MSE respondents across India and sectors.

The CriSidEx score increased to 121 in SQ​ (January-March 2018)​ from 107 in October-December 2017, which validates the expectation of higher optimism made by the first quarterly survey.For April-June 2018 (called the next quarter, or NQ), expectations continue to be positive.

Within Manufacturing, Chemicals, Auto Components, and Engineering and Capital Goods-related MSEs reported strongly positive sentiment in SQ, while segments with a significant presence of unorganised enterprises such as leather & leather goods, and gems & jewellery were subdued.

MSEs in Auto Components, Chemicals, and Engineering and Capital Goods were the most optimistic about NQ.

The Services Sector also is largely optimistic. IT/ITeS, traders and health care providers had a healthy showing in SQ, but not so in logistics and construction/real estate-based MSEs. Traders, health care providers, and human resource services firms are expected to continue doing well in NQ.

Mr. Mohammad Mustafa, Chairman and Managing Director, SIDBI said that in terms of legal constitution, companies were marginally more positive than firms. Unorganised players, or micro enterprises with less than 10 employees, had a marginally larger share of respondents citing a subdued SQ.

Mr Ashu Suyash, Managing Director & CEO said that Overall, MSEs in manufacturing are slightly more optimistic than their services sector counterparts. In terms of order book, production and capacity utilisation, MSEs expect the situation to improve further in April-June 2018, and we see that corroborated in the feedback on hirings.

Unorganised MSEs also reported a slight improvement in performance. About 13% of them, with less than 10 employees, reported a bad SQ compared with 22% in October-December.

 Meanwhile, lenders hold a neutral view for NQ, with 9 out of 10 saying the overall business situation will be satisfactory.

As many as 7 out of 10 lenders did not find any change in the situation of MSE non-performing assets (NPA) accounts in SQ and majority of lenders do not expect an increase in NPA accounts in NQ.

Business sentiment index shows stronger MSE optimism led by manufacturing, with operational improvement expected and lenders neutral on NPAs. CriSidEx for January-March 2018 shows MSE sentiment improved to 121 from 107, led by Manufacturing (Chemicals, Auto Components, Engineering and Capital Goods) while unorganised-heavy segments remained subdued; Services were mixed. Operational indicators and hiring are expected to strengthen next quarter. Companies were marginally more positive than micro unorganised firms, which nonetheless showed some improvement. Lenders held a neutral next-quarter outlook and largely reported no deterioration in MSE NPA accounts nor expectation of increased NPAs.