Weak demand dampens business confidence: FICCI

New Delhi, Sep 2 (IANS) Weak demand and slow economic growth has dampened business confidence in India, according to a survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI).

Nearly 73 percent of the companies that participated in the survey reported weak demand to be a constraining factor during the first quarter of the current financial year, FICCI's quarterly Business Confidence Survey for April-June 2012 revealed.

The corresponding figure in the last survey was 57 percent and a year back 56 percent. Also a significant proportion of participants in the current round indicated cost of credit to be a constraint.

For the first time since the global economic crisis of 2008-09, the prospects of employment opportunities have turned negative. Economic slowdown is now affecting job prospects.

"The respondents did not seem upbeat with regard to current performance and lacked optimism about future performance at all the three levels- economy, industry and firm level," FICCI said in the survey report.

In the current survey, the participating companies were asked to indicate the expected GDP growth for the year 2012-13 on the back of uncertain conditions in the Eurozone and slowdown in the domestic economy.

Almost half of the respondents believed that the GDP growth could be less than 5.5 percent in fiscal 2012-13.

Majority of respondents also indicated that the deficient rainfall have had a clear impact on the performance of their industry/sector. About 85 percent of the respondents reported that the current drought situation would have an impact on their industry.

The survey, conducted in the month of July and August, brings out expectations of the corporate members for the period July-December, 2012, FICCI said.