Survey finds ‘record improvement’ in business confidence – Journal
KARACHI: Overall business confidence in Pakistan has experienced a “record improvement” in recent months, according to a survey by the Chamber of Commerce and Industry of Foreign Investors (OICCI).
The Business Confidence Index (BCI) survey that the OICCI conducted across the country from May to July showed that the overall Business Confidence Score (BCS) was 9%, compared to less than 50% in the previous survey held in May 2020.
Prime Minister Imran Khan took to Twitter on Monday to share the survey results with his 14.1 million followers. “More good news on the economic front… Dramatic increase in business confidence, especially foreign investors,” he tweeted.
The OICCI BCI survey conducted periodically collects feedback from frontline business stakeholders on the environment and opportunities impacting their respective operations.
PM welcomes good news on the economic front
A positive BCI was last observed in April 2018.
The survey is conducted face to face and across the country in nine cities. It covers 80% of GDP, with higher weights given to the main business centers of Karachi, Lahore, Rawalpindi-Islamabad and Faisalabad.
The survey sample consisted of 40 percent respondents from the manufacturing sector, 35 percent from the service sector and 25 percent from retailers and wholesalers. The growing confidence of the business community is driven by all three sectors, with the top two registering an increase of 65 percentage points each – manufacturing from -48 to 17 percent and services from -59 to 6 percent. The retail / wholesale sector grew by 44 percentage points, from -44% to zero.
When the lockdown restrictions were lifted, many manufacturing issues reverted to their 100pc production capacity.
Retailers and wholesalers have been more affected by the Covid-19 restrictions as their hours of operation have been shortened. This segment also believes the next six months will be better with more sales and profits.
The main driving force behind the turnaround of the last BCS is the significant increase in respondents’ optimism for the next six months regarding the business situation of their respective city (21pc), the state of industry and business (19pc ), their own business situation (20pc), forecasts increase in sales volume (20pc), increase in profits (22pc) and increase in return on investment (19pc).
Comments from OICCI members who were randomly included in the survey also recorded a “sharp turnaround”. It showed an improvement of 108 percentage points, from minus 74pc to 34pc.
Commenting on the improvement in the BCS, OICCI President Irfan Siddiqui said this suggested a “very dramatic turnaround” in the confidence of businesses, including foreign investors. “Despite difficult macroeconomic indicators like a high exchange rate and accelerating inflation partially offset by a reduced bank interest rate, the latest comments from the CBI strongly reflect the business community’s optimism for the future, unlike to the pessimism of previous editions, “he said. .
He noted that the main drivers of this optimism and shift in sentiment are the positive perception of the future of the business community, especially the next six months.
The 2021-2022 budget turned out to be positive for the business community, as the BCI score was significantly higher after the budget was announced, with respondents perceiving the new policies to be “more transparent, consistent and predictable”.
According to OICCI CEO Mr. Abdul Aleem, the top three threats to business growth identified by survey respondents are corruption (67pc), volatile energy costs (66pc) and currency devaluation ( 60pc).
Looking ahead, survey respondents expressed optimism for the next six months, with 25% expecting an expansion in business operations, 39% anticipating new capital investments and 12% indicating plans to increase employment. in their respective companies.
The OICCI has more than 200 members from 35 countries and is present in 14 sectors of the economy. They contribute over a third of Pakistan’s total tax revenue each year.
Posted in Dawn, le 24 August 2021