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Services sector prospects robust: KPMG Study |
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According to a survey of more than 1,400 companies in the BRIC countries by KPMG, the prospects for the Indian services sector are robust over the next one year. The study said that 60 per cent of the service providers in India expect an increase in business activity, the highest among the BRIC (Brazil, Russia, India and China) countries. The ‘spring 2008 KPMG Business Outlook' covered 435 Indian service sector companies engaged in financial intermediation and transport and storage, renting and business development, hotels and restaurants and other services.
As many as 56.3 per cent of the Indian respondents said they expect an increase in new business this year, while none expect a fall. India stood second in this section of the survey, compared to other BRIC economies.
"The optimism reflects India's unique positioning, with its large domestic market, offshoring service capabilities and economic value drivers," said Russell Parera, CEO, KPMG in India.
Indian companies had a more positive outlook on profits than their BRIC counterparts. As many as 57.8 per cent of Indian companies forecast higher profits and none expected a decline.
Moreover, 58 per cent of Indian respondents maintained that they would see higher revenues in the current year. The factors contributing to a rise in revenues include sales and marketing, new products, improving market conditions and lower input costs.
"Increased revenues and profits are set to support the rising capital expenditure," a KPMG release said.
The positive outlook of Indian service sector companies should lead to enhanced job creation. As many as 41.2 per cent of the companies surveyed spoke about higher rate of job creation.
In the BRIC economies as a whole, 58 per cent of the service sector companies surveyed expected a growth in business activity, while 56 per cent forecast an increase in new work. More over, 38 per cent of the respondents reported increased availability of credit, despite a global financial market turmoil since the summer of 2007.
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