Business inflation expectations ease in May, says IIMA survey
Ahmedabad, July 3 (TNT): One-year-ahead business inflation expectations declined sharply to 5.13 per cent in May 2026 from 5.64 per cent in April, indicating easing cost pressures, according to the latest Business Inflation Expectations Survey (BIES) released by the Indian Institute of Management Ahmedabad (IIMA).
The survey, based on responses from around 1,100 manufacturing companies, found that while inflation expectations moderated by 51 basis points, they remained above 5 per cent for the fourth consecutive month. Uncertainty surrounding business inflation expectations also continued to remain elevated at above 2 per cent for the fifth straight month.
The survey showed mixed trends in input costs. The proportion of firms reporting a moderate increase in unit costs (3-6 per cent) rose from 22 per cent in April to 26 per cent in May, while the share of firms reporting costs rising by more than 6 per cent remained around 46 per cent for the second consecutive month.
Business sentiment on sales weakened during the month. Around 65 per cent of firms reported sales as either ‘much less than normal’ or ‘somewhat less than normal’, compared with 57 per cent in April, indicating a sharp deterioration in demand conditions.
Profit margin expectations also worsened. The proportion of firms reporting profit margins as ‘somewhat less than normal’ or worse increased to 78 per cent in May from 72 per cent in the previous month, reflecting continued pressure on corporate profitability.
The monthly survey, conducted by the Misra Centre for Financial Markets and Economy at IIM Ahmedabad, captures business expectations on inflation, costs, sales and profit margins, providing an important indicator of pricing behaviour and demand conditions in the economy.
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