Dun & Bradstreet: India’s Business Optimism Holds Broadly Steady Quarter-on-Quarter as Domestic Demand Outlook Softens

Chennai: Dun & Bradstreet, a global leader in business decisioning data and analytics, released its Business Optimism Index (BOI) for Q4 2026, which stood at 111.7, broadly unchanged from 111.8 in Q3 2026, but 3.0% lower than Q4 2025. The Index declined year-on-year for the fifth consecutive quarter, indicating that businesses continue to remain cautious.

The findings point to an uneven outlook, with businesses remaining cautious about domestic demand and profits. While sentiment improved among medium enterprises and global economic confidence edged higher overall, confidence remained uneven across business size. The uneven outlook underscores the value of timely business intelligence to help companies assess changing demand, manage risk, and identify growth opportunities.

Arun Singh, Chief Economist, Dun & Bradstreet India, said, “India’s stable headline business optimism masks a more cautious outlook for demand and profitability. Domestic-order and profit optimism have reversed their Q3 gains, suggesting that resilience has yet to translate into a sustained, broad-based improvement in business confidence. With September retail inflation at 5.54% and food inflation at 7.74%, household purchasing power faces renewed pressure. The RBI’s 25-basis-point hike to 5.50%, alongside the US Federal Reserve’s September increase, adds financing pressure when firms are already navigating uncertain demand. Higher borrowing costs could squeeze working capital, temper credit-led consumption and raise the hurdle for fresh investment, particularly for smaller businesses. Improved global macro-economic sentiment in our survey is encouraging, but export-order optimism remains below last year’s level. The key test is whether stronger activity translates into sustained orders and cash flows despite higher costs. Timely business intelligence can help firms respond to changing demand, allocate capital more carefully and identify opportunities for sustainable growth.”

Key findings from the Q4 2026 survey

•Domestic-order optimism declined 4.4% QoQ and 14.9% YoY to 67.2, its lowest level since Q3 2024. Utilities recorded the highest optimism at 83.3, followed by food manufacturing at 79.2.

•Sales optimism moderated 0.9% QoQ and 7.8% YoY to 74.4. Accommodation and food service activities were the most optimistic at 87.5, followed by information and communication at 83.3.

•Export-order optimism remained broadly unchanged at 59.3, increasing 0.1% QoQ but declining 8.8% YoY. Automobile manufacturing led at 87.5, followed by capital goods manufacturing at 77.1.

•Profit optimism declined 5.3% QoQ and 1.0% YoY to 67.5, even as selling-price optimism increased 2.7% QoQ. Utilities recorded the highest profit optimism at 79.2, followed by transportation and storage at 78.6.

•Domestic macroeconomic optimism improved 1.2% QoQ to 75.8, although it remained 10.2% lower YoY. Construction led optimism at 88.3, followed by electricals manufacturing at 87.5.

•Global macroeconomic optimism increased 0.5% QoQ and 3.5% YoY to 71.8. Optimism stood at 90.5 among small enterprises and 87.1 among large enterprises, compared with 37.7 among medium enterprises.

•Employment optimism remained broadly stable at 62.7, edging down 0.3% QoQ and 5.3% YoY. Automobile manufacturing recorded the highest optimism at 75.0.

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