MSME confidence in ‘expansionary’ phase despite global volatility: Report

New Delhi:The MSME Business Confidence Index stood at 59.3 for the April‑June 2026 quarter, compared to 59.8 in the previous quarter, remaining comfortably above the 50‑mark and signalling “business confidence remains in expansionary territory despite the uncertain global environment,” a report said on Friday.

The report from Small Industries Development Bank of India (SIDBI) said that profitability also remained largely stable across sectors. Most enterprises reported no significant change in profit margins during the quarter.

The MSME Business Expectations Index for July‑September 2026 was 60.1 and is expected to improve to 61.2 for April‑June 2027, “indicating sustained optimism about business prospects over the coming year.”

Meanwhile, 21 per cent of manufacturing enterprises, 20 per cent of trading enterprises and 22 per cent of services enterprises reported an improvement in net profit margins, even as 20 per cent to 30 per cent of businesses across sectors reported a decline, indicating that margin pressures continue for some MSMEs.

The survey showed that MSMEs continue to face challenges such as cost pressures, demand concerns and shortage of skilled labour, but the overall mood across the sector remains positive.

Businesses have reported stable sales, steady profit margins and continued access to finance, while expectations for the coming quarters remain encouraging.

Sales sentiment remained broadly positive across manufacturing, trading and services. While manufacturing and services enterprises became slightly more cautious than in the previous survey round, trading enterprises performed better, with fewer businesses reporting a pessimistic outlook.

Around 20 per cent of respondents in the manufacturing and services sectors reported a deterioration in the availability of skilled workers. However, most enterprises said labour availability remained stable or improved during the quarter, although a section expects skill shortages to continue.

Most enterprises reported steady availability of working capital finance during the quarter. While manufacturing enterprises expect some moderation going forward, businesses in the services and trading sectors expect working capital availability to improve.

IANS