Business conditions are expected to improve as over 63% of the firms expect an increase in sales in Jan-Mar 2017, as compared to only 39% who experienced the same in October-December 2016.

On similar lines, 60 per cent of the respondents anticipate an increase in new orders during Jan-Mar 2017 as compared to 41.0 per cent who witnessed the same in the preceding quarter.

Much of the recovery in business conditions is expected to be domestically driven as a large proportion of firms (61.8%) expect to maintain status quo on their export orders in Jan-Mar 2017.

In an indication that the turn of the investment cycle is now imminent, firms expect an improvement in capacity utilization in the fourth quarter of FY17. This is borne out from the fact that around 65 percent of respondents expect capacity utilization levels to be above 75% while only 36 percent of respondents experienced the same in the Oct-Dec 2016 quarter.

Despite the rise in capacity utilization, majority of firms expect no change in their domestic and international investment plans in Jan-Mar 2017. More than half of the firms expect to maintain status quo on their plans about investing in the domestic economy in the Jan-Mar 2017 quarter.

Firms are keeping investment plans on hold despite the expectation of an improvement in sales and new orders in the Jan-Mar 2017 quarter owing to the existing excess capacity in the economy.

Firms, when asked to rank their concerns in the coming six months, have stated low domestic demand followed by fragile global economic recovery and rise in commodity prices as their key concerns.

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