MSME Confidence Holds Firm at 59.3 Despite Global Uncertainties: SIDBI

India’s Micro, Small and Medium Enterprises (MSMEs) have remained resilient amid global uncertainties, including the conflict in West Asia, with business confidence staying in positive territory and enterprises retaining an optimistic outlook for the year ahead, according to the latest MSME Outlook Survey for April-June 2026 released by the Small Industries Development Bank of India (SIDBI).

The survey found that MSMEs continue to face challenges related to cost pressures, demand and the availability of skilled labour. However, sales remained stable, profit margins were broadly steady and access to finance continued to be consistent, while expectations for the coming quarters remained positive.

The MSME Business Confidence Index (M-BCI) stood at 59.3 in the April-June 2026 quarter, compared with 59.8 in the previous quarter. The index remained above the 50-mark, indicating that business confidence continued to be in expansionary territory despite global uncertainties.

The MSME Business Expectations Index (M-BEI) stood at 60.1 for the July-September 2026 quarter and is expected to rise to 61.2 for April-June 2027, indicating continued confidence in business conditions over the coming year.

Sales sentiment remained positive across manufacturing, trading and services during the April-June quarter. While manufacturing and services enterprises were slightly more cautious than in the previous survey round, trading enterprises reported an improvement, with fewer businesses indicating a pessimistic outlook.

Profitability remained broadly stable across sectors, with most enterprises reporting no significant change in profit margins during the quarter. Around 21% of manufacturing enterprises, 20% of trading enterprises and 22% of services enterprises reported an improvement in net profit margins. At the same time, between 20% and 30% of enterprises across the three sectors reported a decline in margins, indicating continued pressure on profitability for a section of MSMEs.

The availability of skilled labour remained one of the key challenges. Around 20% 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 some respondents expect skill shortages to persist.

Access to finance remained broadly stable across sectors, with most enterprises reporting steady availability of working capital finance during the quarter. Manufacturing enterprises expect some moderation in working capital availability going forward, while services and trading enterprises expect an improvement. A similar trend was observed in overall finance availability with manufacturing and services enterprises anticipating some moderation, while trading enterprises expect a significant improvement over the next year.

Overall, business sentiment among MSMEs remained positive and broadly unchanged from the previous quarter. In the services sector, the share of enterprises expecting better business conditions one year ahead moderated to 32%, compared with 44% at present, although the overall outlook remained positive.

The MSME Outlook Survey is SIDBI’s quarterly assessment of business sentiment among MSMEs. It tracks current business conditions through the MSME Business Confidence Index (M-BCI) and future expectations through the MSME Business Expectations Index (M-BEI). Both indices are measured on a scale of 0 to 100, with a score above 50 indicating a positive or expansionary outlook.