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65% businesses report a decrease in overall sales during last year: Gallup

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July 26, 2021 (MLN): The business confidence index (BCI) is in Green territory pointing that businesses are now posing confidence in future business situations and optimistic about the direction of the country. However, the current business situation score is negative in Q1 2021, indicating poor confidence in the current business situation.

The survey, which sought responses from around 490 businesses across Pakistan from 4th June 2021 to 1st July 2021, was published by Gallup in its second-quarter 2021 report of Gallup Pakistan's Business Confidence Index.

According to the survey, 49% of businesses reported being doing well while 52% of businesses reported bad business conditions. Overall, the number of businesses reporting good business conditions has lessened while the number of businesses reporting bad business conditions has increased as compared to the last quarter.

Since Q4 2020, the current business assessment has deteriorated with a 24% decrease in people claiming their business situation to be good.

The survey revealed that 63% businesses believe the country is in the right direction, the net score increased by 20% since the 4th Quarter of 2020.

65% of the businesses’ sales have decreased during the past year due to corona & lockdown and its impact on businesses.  

The breakdown by business type showed that nearly 3 in 5 service businesses reported a decline in sales in the past year, closely followed by 58% of manufacturing businesses reporting a decline. The highest increase was reported by trade businesses at 21%.

As per the survey, 67% of Karachi businessmen report that their sales have decreased, 15% report that they have increased while 18% claim that they have remained the same amid covid related restrictions.

2 in 5 businesses reported around an increase in sales up to 20%, followed by 35% businesses each reporting a 20-40% increase. Only 5% of businesses reported an increase in sales over the past year to greater than 60%.

Around 50% of businesses reported having the same number of employees while 42% of businesses reported laying off/ having fewer number off employees compared to 12 months ago. The number is pointing towards massive unemployment increase and continuing till now.

The provincial breakdown highlighted that the percentage of traders considering the business conditions good is highest in Sindh at 50% while 59% of businesses in Khyber Pakhtunkhwa and Balochistan reported bad business conditions.

7 in 10 Businesses in the survey are confident that the future will be better. However, the Net Future Business Confidence score decreased by 3% (falling from 44% to 41%) since Quarter 4, 2020. On a provincial basis, 71% businesses from Sindh are optimistic for the future of their business. Businesses in KPK & Balochistan and Punjab were found to be equally least optimistic about their future business scenario.

As compared to Q4 2020, there has been a 10% increase in the number of businesses to 26% that opine that the country is heading in the right direction.

With regards to problems affecting businesses, the survey noted that Like Q4 2020, an increase in inflation, followed by issues caused by coronavirus and lockdown are the most pressing problems businesses want the government to solve in Q2 2021.

57% of businesses reported experiencing load shedding within a day, with most of them experiencing for 3 hours. Around 7 in 10 businesses claimed that load-shedding was a big problem for their business, the highest being reported by trade businesses.

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Posted on: 2021-07-26T17:24:00+05:00

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