Business Confidence Index rises to 55.4 in January 2026

January 26, 2026 (MLN):   The overall Business Confidence Index (BCI) increased by 2.0 points, reaching 55.4 in January 2026, 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 incline showed strengthening 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, increased by 2.3 points to 52.9 in January 2026. This incline was driven by improving perceptions of general economic conditions, with businesses reporting stronger production levels, and better credit conditions compared to the previous six months.

Expected Business Confidence

The EBCI, representing expectations for the next six months, rose by 1.73 points to 57.83, 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 stayed constant at 5.8 in January 2026. Businesses expect both overall inflation and input prices to moderate compared to earlier expectations, with the expected input price index falling by 1.3 points to 65.9.

Employment

The Expected Employment Index decreased by 1.3 points to 54.8 in the current wave, while the Current Employment Index went up by 1.4 points to 52.0.

The increase in current employment sentiment showed higher staffing levels across firms over the past six months.

Capacity Utilization

The Average Current Capacity Utilization (ACCU) in the Manufacturing sector decreased by 0.2 percentage points to 66.2% in January 2026, 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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