Business Confidence Index rises to 63.75; optimistic trends seen in sales, finance access, and capacity utilisation across sectors
Mumbai, July 30: The Small Industries Development Bank of India (SIDBI) on Wednesday unveiled the third edition of its MSME Outlook Survey for April–June 2025 (Q1FY26), highlighting growing confidence and resilience across India’s micro, small, and medium enterprise (MSME) ecosystem. The findings reveal an upbeat sentiment among businesses across manufacturing, services, and trading sectors, supported by improvements in sales, skilled labour availability, capacity utilisation, and access to finance.
The Composite MSME Business Confidence Index (M-BCI) surged to 63.75, up from 60.82 in the previous quarter, indicating a continued positive outlook for the sector. Meanwhile, the MSME Business Expectations Index (M-BEI) stood at 62.19 for the upcoming quarter and 67.88 for the same period next year, signalling strong long-term optimism.
The survey, conducted with inputs from 1,200 MSMEs across India, serves as both a lead and lag indicator, offering insights on sales, profitability, skilled labour, capital access, and the ease of doing business.
Sectoral performance remained buoyant:
- Over 50% of MSMEs in manufacturing and trading reported sales growth during the quarter.
- In the services sector, 42% reported higher sales while another 48% indicated stable revenues.
- Approximately 60% of all MSMEs expect sales to rise further over the next year.
Profitability remains stable despite rising input costs. Net margins improved across sectors, with service and trading firms anticipating higher cost pressures going forward but maintaining a confident earnings outlook.
A notable improvement in skilled labour availability was reported by nearly 25% of MSMEs, with more expecting gains in the coming year. Capacity utilisation also improved, with about 20% of enterprises operating above normal levels and 29% forecasting further increases.
On the financing front, 88% of MSMEs reported sufficient access to finance, up from 79% in the previous round. This marks a significant development for credit expansion, particularly in the trading segment. Although MSMEs continue to express concern over financing costs, recent policy action—including a 100 basis point cut in the RBI repo rate since February 2025—has helped ease borrowing conditions.
The survey also revealed an improvement in Ease of Doing Business (EoDB), with half the respondents reporting better experiences during Q1FY26. Return filings and compliance procedures were among the areas of marked progress.
The full report is available on SIDBI’s website at www.sidbi.in/en/msme-outlook-survey.
