KARACHI: Despite general growth in turnover and profitability, as suggested in recent corporate results, business sentiment has dipped by 9% over the past six months due to growing concerns related to energy shortages, worsening security, and inflationary pressure, according to a survey conducted by the Overseas Investors Chamber of Commerce and Industry (OICCI).
The 6th Wave Business Confidence Index (BCI) survey, undertaken by the OICCI between June and August 2012, reveals that business confidence has slumped over the half-year period. The survey, which tracks business sentiment, is largely attitudinal and is carried out biannually.
Compared to the 5th Wave BCI survey, recent results show a further decline in sentiment from negative 25% to negative 34%. The sharp drop in business confidence is led mainly by poor sentiments in the retail sector, where the BCI score went down from negative 29% to negative 48%; and of the manufacturing sector, which also declined significantly from negative 23% to negative 37%. This decline was partially offset by relatively positive outlook in the services sector, where BCI improved by 7%; from negative 24% to negative 17%.
Apart from the increase in overall negativity as regards to business, the 6th wave also reveals a shift in respondents’ opinion from the positive to neutral zone, which is reflected in a decline in the overall business confidence score. Interpreting the feedback, it appears that businesspersons have now lowered their expectations from the authorities.
The BCI is the only survey which measures business sentiment at equal time intervals and provides a valuable gauge for policy makers as well as all stakeholders in the country’s economy.
Published in The Express Tribune, September 27th, 2012.