Pakistan’s business confidence index falls in September

SBP conducted latest Business Confidence Survey (BCS) in collaboration with Institute of Business Administration.

The Business Confidence Index (BCI) in Pakistan decreased by one point to 50.0 in September 2024, according to the latest Business Confidence Survey (BCS) conducted by the State Bank of Pakistan (SBP) in collaboration with the Institute of Business Administration (IBA).

The decrease in confidence was driven by declines in both the Industry and Services sectors.

Specifically, the confidence in the Industry sector dropped by 0.6 points to 48.1, while the Services sector saw a decline of 1.0 points, bringing its index to 50.7.

Source: Business Confidence Survey (BCS)* – September 2024 (52nd Wave)

This dip in business confidence reflects growing concerns within the Pakistani business community over the current economic situation.

Current Business Confidence:

The Current Business Confidence Index (CBCI) experienced a notable decline, falling by 1.6 points to 47.8 in September 2024.

 

The Industry sector’s CBCI dropped by 0.8 points to 46.3, and the Services sector declined by 1.8 points to 48.4.

Positive views on current business conditions decreased by 4.3%, with more firms adopting a neutral or negative outlook.

Expected business confidence:

Expectations for future business conditions also took a hit, with the Expected Business Confidence Index (EBCI) declining by 0.3 points to 52.3.

Confidence within the Industry sector fell by 0.4 points to 50.0, while the Services sector dropped by 0.3 points to 53.0.

There was a slight increase in negative views regarding future business conditions.

Purchasing Managers Index (PMI):

The Purchasing Managers Index (PMI) fell by 0.8 points to 49.3 in September 2024.

Business activities decreased by 2.9 points, while total orders booked, raw material purchases, and employment figures also declined.

However, supplier delivery times improved by 2.5 points, indicating some relief in supply chain issues.

Inflation expectations:

Inflation expectations among businesses dropped significantly in September 2024, with the index decreasing by 6.2 points to 61.0.

The Industry sector saw a reduction of 5.0 points to 62.1, and the Services sector's expectations decreased by 8.0 points to 59.3, reflecting easing inflationary pressures.

Employment outlook:

Employment expectations also weakened, as the Current Employment Index fell by 1.1 points to 50.3.

The Expected Employment Index dropped by 1.9 points to 51.7, indicating concerns over future hiring, particularly in the Industry sector, which saw a decline of 2.0 points.

Capacity utilisation:

The Manufacturing sector’s Average Current Capacity Utilization (ACCU) slightly decreased by 0.3%, bringing it to 65.6% in September 2024.

This survey provides a snapshot of the sentiment across Pakistan’s business landscape, highlighting the challenges posed by fluctuating economic conditions.