Pakistan’s Business Confidence score down 19 per cent in fourth quarter

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LAHORE: The country’s future business situation witnesses a declined confidence, compared with the previous quarter as six in 10 businesses are confident that the future will be better.

However, the Net Future Business Confidence score decreased 19 per cent, falling to 22 per cent from 41 per cent since the second quarter of 2021, according to the Gallup Pakistan Business Confidence Index (BCI) quarterly report for the fourth quarter of 2021 released on Sunday.

The Gallup Pakistan found that businesses across all provinces were found to be almost equally optimistic about the future.

Image: Gallup Pakistan

“Businesses related to electrical items and spare parts, medical equipment, and manufacturing products are [the] most optimistic of future business conditions, while fertilisers and pesticides are least optimistic,” the quarterly report said.

According to the Gallup Pakistan survey, compared with the second quarter of 2021, there has been an 18 per cent decrease in the number of businesses that believe that the country is heading in the right direction.

It said 42 per cent businesses from Punjab believe the country is heading in the right direction. The net score across all provinces is negative.

As per the survey, six in 10 businesses report having less revenue this month than 12 months ago. For 59 per cent of the businesses, the sales have declined during the last year, while one in five businesses report the same number of sales as before.

“[The] highest decline in sales over the last year was reported to be experienced by [the] fertilisers and pesticides and books and stationery business,” the survey reads.

The Gallup Pakistan said 33 per cent businesses reported a decrease of 40 per cent to 60 per cent; followed by 24 per cent of businesses reporting a decrease of 20 per cent to 40 per cent, while 19 per cent businesses reported a 60 per cent to 80 per cent decrease and 8 per cent reporting more than 80 per cent decrease in sales over the last year.

Image: Gallup Pakistan

“Nearly four in 10 (39 per cent) businesses reported an increase in sales of up to 20 per cent; followed by 21 per cent businesses reporting a 20 per cent to 40 per cent increase. Only 1 per cent of businesses reported an increase in sales of more than 100 per cent,” the survey showed.

According to the survey, 40 per cent of businesses reported having the same number of employees, while 46 per cent of businesses reported laying off/having a fewer number of employees, compared with 12 months ago.

The businesses, which had to lay off the most employees are those related to industrial machine parts and equipment, fertilisers and pesticides, and electrical items and spare parts.

The Gallup Pakistan also revealed that 46 per cent businesses reported to be doing well, while 20 per cent reported very bad business conditions. Overall, the number of businesses reporting very good business conditions has increased slightly, while the number of businesses reporting bad business conditions has decreased, compared with the last quarter.

“[Around] 55 per cent businesses from Punjab and Sindh, each reported good business conditions nowadays, while 51 per cent businesses in Khyber-Pakhtunkhwa/Balochistan/GB/Islamabad/AJK combined reported bad business conditions,” the quarterly report showed.

The businesses related to trade reported good/very good current business conditions, while businesses related to fertilisers and pesticides and industrial machine parts and equipment reported that their businesses are doing bad or very bad.

Image: Gallup Pakistan

According to Gallup Pakistan’s survey, an increase in inflation; followed by the problems caused by increased dollar rates are the most pressing issues businesses want the government to resolve in the fourth quarter of 2021.

“A 7 per cent of businesses report no issues that need to be resolved by the government and 44 per cent of the businesses reported experiencing load-shedding within a day, with most of them experiencing it for two hours,” the survey said.

Around 44 per cent businesses claimed that they were somewhat satisfied with the quality of human resources available to them and 77 per cent businesses in Sindh are satisfied with the quality of human resources available to them; followed by 72 per cent businesses in Punjab reporting the same, the Gallup survey showed.



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