Business Confidence Index falls to 55.1 in October 2025

October 29, 2025 (MLN): The overall Business Confidence Index (BCI) decreased by 0.5 points, reaching 55.1 in October 2025, according to the latest results of the Business Confidence Survey (BCS), conducted by the State Bank of Pakistan (SBP) in collaboration with the Institute of Business Administration (IBA).

This decline showed weakening sentiment across key business indicators, with both current and expected confidence measures showing deterioration compared to the previous wave.

According to the survey report, the headline index "Overall Business Confidence" is comprised of two sub-indices: the Current Business Confidence Index (CBCI) and the Expected Business Confidence Index (EBCI).

The overall BCI is a weighted average of the Industry and Services sectors with 0.25 and 0.75 weights, respectively.

Current Business Confidence

The CBCI, which shows business sentiment over the past six months, decreased by 0.53 points to 50.86 in October 2025. This decline was driven by deteriorating perceptions of general economic conditions, with businesses reporting weakened production levels, reduced employment, and tighter credit conditions compared to the previous six months.

Expected Business Confidence

The EBCI, representing expectations for the next six months, rose by 4.2 points to 54.76, indicating that businesses remained cautiously optimistic about the near future despite current challenges. This improvement was supported by positive expectations for production, employment, and product demand in the coming months.

Inflation Expectations

The Inflation Expectations (IE) of businesses decreased by 1.18 points to 68.60 in October 2025, showing a slight easing in anticipated price pressures. Businesses expect both overall inflation and input prices to moderate compared to earlier expectations, with the expected input price index falling by 5.68 points to 62.32.

Employment

The Expected Employment Index decreased by 0.94 points to 56.44 in the current wave, while the Current Employment Index fell by 0.88 points to 53.21.

The decline in current employment sentiment showed reduced staffing levels across firms over the past six months, while future employment expectations remained in positive territory, suggesting businesses anticipate modest hiring in the near term.

Capacity Utilization

The Average Current Capacity Utilization (ACCU) in the Manufacturing sector decreased by 1.55 percentage points to 64.65% in October 2025, signaling reduced production intensity compared to the previous wave. This decline aligned with weaker order books and inventory adjustments reported by manufacturers.

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